Judge Kerry Bensinger, Case Number: 24STCP03209, Date: 2025-01-08 Tentative Ruling

In 2021, a putative class of consumers filed a class action antitrust lawsuit against respondent Valve Corporation (Respondent or Valve). The consumers’ claims were compelled to arbitration. In October 2023, petitioner Jonathan Beer (Petitioner or Beer), a consumer, filed a claim against Valve with the American Arbitration Association (AAA). The matter proceeded to arbitration with AAA. To select an arbitrator, AAA asked the parties to list “all people, firms, companies, and/or groups involved in the arbitration, including, but not limited to, witnesses, consultants, attorneys, and all other interested parties.” The parties complied. Thereafter, AAA circulated the parties’ conflict lists to its roster of arbitrators and solicited conflict forms. AAA proposed arbitrator Martin Katz (Arbitrator Katz) to hear Beer’s claims. The parties dd not object, and Arbitrator Katz was appointed to preside over Beer’s claims (as well as over 25 arbitrations connected to the underlying antitrust lawsuit). Nearly four months after his appointment, Valve moved to disqualify Arbitrator Katz on the grounds that Arbitrator Katz and the law firm at which he works had represented and continued to represent video game developers who are putative class members adverse to Valve in a related, ongoing putative class action. AAA heard from the parties and issued an administrative ruling disqualifying Arbitrator Katz. No award, final or interim, was issued prior to or after Arbitrator Katz’s disqualification.

Before the court are three matters: (1) Beer’s Petition to Vacate Disqualification of an Arbitrator, (2) Applicant Michael W. McTigue Jr.’s Application to be Admitted Pro Hac Vice, and (3) Applicant Meredith C. Slawe’s Application to be Admitted Pro Hac Vice. The court addresses the pro hac vice applications together in Section III.

On October 4, 2024, Beer filed this Petition to Vacate Disqualification of An Arbitrator.

On November 12, 2024, Valve filed a Response and request to Dismiss Petition to Vacate Disqualification of an Arbitrator.

Beer seeks an order vacating the AAA’s decision to disqualify Arbitrator Katz pursuant to Code of Civil Procedure section 1286.2(a)(4). Section 1286.2(a)(4) provides, “the court shall vacate the award if the court determines … (4) The arbitrators exceeded their powers and the award cannot be corrected without affecting the merits of the decision upon the controversy submitted.”

Beer’s motion is a procedural anomaly. As Valve points out, Beer does not seek to vacate an arbitration award. No such award was issued. Section 1286.2 does not provide a basis for the relief Plaintiff seeks.

In reply, Beer argues the disqualification decision terminated the arbitration which amounted to a final award subject to vacatur. In support, Beer cites Wallrich v. Samsung Elecs. Am. (7th Cir. 2024) 106 F.4th 609, 620 (Wallrich). In Wallrich, a case involving arbitration between a consumer and a manufacturer, the manufacturer refused to pay arbitration filing fees. The arbitration agency thereafter terminated arbitration proceedings. The consumer petitioned the court to compel the manufacturer to arbitrate and to pay the arbitration filing fees. The manufacturer appealed. On appeal, the Seventh Circuit Court of Appeals held that the district court did not have authority to compel arbitration because the AAA’s decision to terminate arbitration effectively completed the arbitration.

Wallrich does not direct a different result. Unlike Wallrich, AAA did not terminate the arbitration. AAA’s decision merely disqualified Arbitrator Katz. Indeed, Beer does not present any evidence to establish that the arbitration has been terminated or otherwise completed.[1]

Given the lack of clarity concerning the status of the proceedings, the court is left to conclude the arbitration is ongoing. Proceeding from this assumption, the court notes its power to intrude upon an ongoing arbitration is limited. By way of example, when a court compels a case to arbitration pursuant to a petition or motion to compel, the court merely retains “vestigial jurisdiction.” “[U]nder under its “vestigial” jurisdiction, a court may: appoint arbitrators if the method selected by the parties fails (§ 1281.6); grant a provisional remedy “but only upon the ground that the award to which an applicant may be entitled may be rendered ineffectual without provisional relief ” (§ 1281.8, subd. (b)); and confirm, correct or vacate the arbitration award (§ 1285). Absent an agreement to withdraw the controversy from arbitration, however, no other judicial act is authorized. (Citation omitted.)” (Titan/Value Equities Group, Inc. v. Superior Court (1994) 29 Cal.App.4th 482, 487–488.)

Here, Beer does not seek intervention from this court concerning the method to appoint an arbitrator, a provisional remedy, or to confirm, correct, or vacate an arbitration award. Beer does not identify any authority permitting this court to effectively overturn AAA’s administrative decision.

Accordingly, the Petition to Vacate Disqualification of an Arbitrator is DENIED.

On December 3, 2024, Applicants, Michael W. McTigue Jr. and Meredith C. Slawe, filed these applications to appear pro hac vice on behalf of Respondent, Valve Corporation, in this action.

California Rules of Court, rule 9.40 provides that an attorney in good standing in another jurisdiction may apply to appear as counsel pro hac vice in the State of California by filing a verified application together with proof of service by mail of a copy of the application and notice of hearing on all parties who have appeared in the case and on the State Bar of California at its San Francisco office, with payment of a $50.00 fee, so long as that attorney is not a resident of the State of California, and is not regularly engaged in substantial business, professional, or other activities in the State of California.¿ (Cal. Rules of Court, rule 9.40.)¿¿

The application must state: (1) the applicant’s residence and office addresses; (2) the courts to which the applicant has been admitted to practice and the dates of admission; (3) that the applicant is a member of good standing in those courts; (4) that the applicant is not currently suspended or disbarred in any court; (5) the title of each court and cause in which the applicant has filed an application to appear as counsel pro hac vice in this state in the preceding two years, the date of each application, and whether or not it was granted; and (6) the name, address, and telephone number of the active member of the State Bar of California who is attorney of record in the local action.¿ (Cal. Rules of Court, rule 9.40(d).)¿¿

Michael W. McTigue Jr. and Meredith C. Slawe seeks a court order allowing them to appear as counsel pro hac vice to represent Respondent in this action.¿¿

Upon review, the court finds the applications comply with California Rules of Court, rule 9.40.¿¿¿

Accordingly, the unopposed applications are GRANTED.¿ It is ordered that Michael W. McTigue Jr. and Meredith C. Slawe be admitted to appear as counsel pro hac vice for the purpose of representing Respondent Valve Corporation in this action.¿ Counsel shall be subject to all applicable rules of this Court.¿

2. Michael W. McTigue Jr.’s Application to Appear as Counsel Pro Hac Vice is Granted.

3. Meredith C. Slawe’s Application to Appear as Counsel Pr Hac Vice is Granted.

Kerry Bensinger

Judge of the Superior Court

[1] The court further notes that the parties have not sufficiently apprised the court of the status of the arbitration, i.e., whether the arbitration has concluded, or whether AAA is appointing a new arbitrator.