Judge Robert S. Draper, Case 22STCV07091 2023-05-17 Tentative Ruling

Plaintiffs F.D. 1 and F.D. 2 (plaintiffs) allege they served on the faculty for defendant University of Southern California (USC), who employed defendant James Cunningham (Cunningham) during all periods relevant to plaintiffs’ complaint.

On February 25, 2022, plaintiffs sued USC and Cunningham for thirteen causes of action arising from plaintiffs’ employment. Plaintiffs allege causes of action for sexual harassment, discrimination, violation of labor laws and regulations, “violation of public policy”, failure to prevent the various violations, intentional/negligent infliction of emotional distress, and unlawful business practices.

As alleged, plaintiffs are female, more than 40 years old, “of non-American national origin”, and requested accommodations of their religious beliefs from USC. (Compl., ¶ 24.) USC purportedly subjected them to discrimination and harassment based on one or more of those protected attributes. (Ibid.) Plaintiffs allege they were subjected to harassment and discrimination by co-workers and “[w]hen [they] reported such behavior, USC did not take adequate protective or corrective action”, in violation of USC’s own policies and generally applicable state law. (Id., ¶¶ 45-47.) USC also allegedly showed “annoyance, exasperation, lack of sympathy, and/or animosity toward Plaintiffs’ in response to their reports. (Id., ¶ 97.) Plaintiffs also allege they provided USC with labor for which plaintiffs were not paid. (Id., ¶¶ 37 and 155.)

On August 8, 2022, the court ordered the parties to arbitrate their dispute and stayed all future proceedings pending arbitration. According to the parties’ arbitration agreement, the arbitration was to proceed “under the auspices of JAMS.”

According to plaintiffs, on November 15, 2022, JAMS’ appointed arbitrator made mandatory disclosures according to Code of Civil Procedure section 1281.9 and related ethics rules. (All further undesignated references are to the Code of Civil Procedure.)

“Has the [arbitration services] provider organization entered into, or does the arbitrator currently expect that the provider organization will enter into, an agreement or relationship with any party or lawyer in the current arbitration or a law firm with which a lawyer in the current arbitration is currently affiliated under which the provider organization will administer, coordinate, or provide dispute resolution services in other matters or will provide other consulting services for that party, lawyer, or law firm?”

The panelist also disclosed: “JAMS has an arrangement with the USC Law School to prove trainings to the public on ADR topics. In addition, JAMS provides neutral hearing officers under a Master Services Agreement with USC to preside over Title IX sexual assault and harassment matters involving students.” (Ibid.)

On November 30, 2022, plaintiffs objected to the appointment of the suggested arbitrator because of the content of his disclosures. Plaintiffs announced their intention to object to all arbitrators who make the same disclosure, ostensibly including all JAMS arbitrators.

Plaintiffs now move to preemptively disqualify any JAMS arbitrator from arbitrating their dispute and “restore the action to the civil calendar” – that is, to remove it from the arbitration which the court ordered in August 2022.

Plaintiffs filed their complaint on February 25, 2022. On May 9, 2022, USC moved to compel plaintiffs to arbitrate their individual claims and dismiss claims plaintiffs brought in a representative capacity on behalf of other USC employees. The court granted both USC’s motions and stayed future proceedings pending arbitration. (8/8/22 Minute Order.)

The court held a post-arbitration status conference on February 8, 2023. After conferring with counsel, the court directed plaintiffs’ counsel to file a Motion to Disqualify JAMS in order for the court to properly address the concerns raised at the conference. (2/8/23 Minute Order.)

Defendants request that the court take judicial notice of decisions by three other courts: two by other civil trial courts within the County of Los Angeles, and one by the Second District Court of Appeal (denying a writ of mandate vacating one of the trial court’s decisions).

Evidence Code section 452, subdivision (d) permits the court in its discretion to take judicial notice of the records of any court in this state. Upon taking notice of court records, the court accepts as true only that (1) they were filed and (2) the assertions therein were made; the court does not take notice of the truth of their contents. (See Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374-375.)

The court notes that the decisions of trial courts do not bind, control, or persuade other courts of equal authority. And to the extent the reasoning of the Court of Appeal might be useful even in an unpublished decision, the exhibit defendant offers reflects that the Second District denied appellant’s writ without comment. There is no appellate reasoning to rely upon or be persuaded by.

Code of Civil Procedure section 1281.9 requires that “[i]n any arbitration . . . when a person is to serve as a neutral arbitrator, the proposed neutral arbitrator shall disclose all matters that could cause a person aware of the facts to reasonably entertain a doubt that the proposed neutral arbitrator would be able to be impartial . . . .” (Code Civ. Proc., § 1281.9, subd. (a).) The section includes among such “matters” “[a]ny . . . required to be disclosed by the ethics standards for neutral arbitrators adopted by the Judicial Council . . . .” (Id., § 1281.9, subd. (a)(2).)

After an arbitrator makes the required disclosures, he or she “shall be disqualified on the basis on the basis of the disclosure statement after any party entitled to receive the disclosure serves a notice of disqualification within 15 days . . . .” (Id., § 1281.91, subd. (b)(1).)

The Second District Court of Appeal recently described a party’s right under section 1291.91, albeit in dicta, as “the absolute right to disqualification . . . under which a party has a right to disqualify an arbitrator without cause one time in a single arbitration.” (Roussos v. Roussos (2021) 60 Cal.App.5th 962, 976-977.)

Defendants argue that even if plaintiffs could seek relief from the court under section 1281.91, the section does not permit them to disqualify JAMS, as a whole, from appointing a neutral to arbitrate the parties’ dispute. They read section 1281.91, which refers repeatedly to “[a] proposed neutral arbitrator”, as applying only to an individual person, not to an entire arbitration services organization like JAMS.

Plaintiffs responds with two reasons why section 1281.91 should permit them to disqualify an organization: first, that defendants simply misinterpret the statute, and it applies to JAMS as much as to any individual; or second, that the section might as well apply to JAMS, because every neutral arbitrator for JAMS will necessarily make the same disclosure as the arbitrator here.

First, the court finds section 1281.91 does not apply to arbitral institutions. The CAA defines “neutral arbitrator” as “an arbitrator who is . . . selected jointly by the parties or by the arbitrators selected by the parties, or . . . appointed by the court when the parties . . . fail to select an arbitrator who was to be selected jointly . . . .” (Code Civ. Proc. § 1280, subd. (g), italics added.) The definition repeatedly uses the term “who” rather than “which” or “that” to refer to an arbitrator. Section 1281.9 regarding disclosure requirements refers to “a person [who] is to serve as a neutral arbitrator . . . .” (Id., § 1281.9, subd. (a), italics added.) And Black’s defines “arbitrator” as “a neutral person who resolves disputes . . . .” (Black's Law Dictionary (11th ed. 2019), “Arbitrator”.)

When interpreting and applying a statute, the court begins with the plain language. (Mt. Hawley Ins. Co. v. Lopez (2013) 215 Cal.App.4th 1385, 1396-1397.) Based on common sense, basic semantics, and maxims of statutory interpretation, section 1281.91 refers only to individual arbitrators, not to an organization that facilitates the services those individuals provide.

Second, plaintiffs cannot broaden the court’s statutory authority based on their predictions – or promises – about what will happen in the future. The issue of future individual arbitrators’ disqualification is not ripe.

It appears that plaintiffs exercised their right to object to an individual neutral arbitrator under section 1281.91, and their first arbitrator honored that right and withdrew. The court does not find it has any power under section 1281.91 to disqualify every JAMS arbitrator in advance based on plaintiffs’ representation that they intend to continue objecting in the future.

“Once a petition is granted and the lawsuit is stayed, ‘the action at law sits in the twilight zone of abatement with the trial court retaining merely vestigial jurisdiction over matters submitted to arbitration.’ [Citation.] During that time, 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.]” (Titan/Value Equities Group, Inc. v. Superior Court (1994) 29 Cal.App.4th 482, 487 (Titan/Value).) Defendants cite the rule of Titan/Value, which relies on Brock v. Kaiser Foundation Hospitals (1992) 10 Cal.App.4th 1790, 1796, both of which are good law; plaintiffs’ contention that defendants “cite no case law to support [their] contention” (Rep., 4:22) is simply incorrect.

Plaintiffs argue the court has jurisdiction in this case because (1) the legislature has not specifically divested it of jurisdiction; (2) the Court’s jurisdiction “is consistent with the statutory purpose to mandate disclosures and provide prophylactic remedies” (Rep., 5:8-9); and (3) according to plaintiffs, more recent case law suggests that “the [CAA] did not remove jurisdiction from the Court to resolve the plaintiffs’ exercise of a statutory right under the Act.” (Rep., 5:31.)

Plaintiffs’ first two arguments fail. The CAA requires that the court stay proceedings while arbitration is pending, and the stay divests the court of much of its jurisdiction. (Code Civ. Proc., § 1281.4.) As to the second point, plaintiffs point to no law establishing a general “statutory purpose” to mandate disclosure and provide “prophylactic remedies”. They also point to no reason why an unspecified “statutory purpose” should be given more weight than the well-established limitations on the court’s jurisdiction stated in Brock and Titan/Value.

Plaintiffs’ third point deserves more attention. The Sixth District ruled quite recently on the extent of a court’s “vestigial jurisdiction” in Williams v. West Coast Hospitals, Inc. (2022) 86 Cal.App.5th 1054 (Williams). On its face, Williams appears to slightly relax the limits on a court’s jurisdiction while arbitration is pending. But Williams did not in fact contradict Brock or Titan/Value, and it does not justify the court exercising jurisdiction in this case.

In Williams, after the court ordered the parties to arbitration, the defendant – who had moved to compel arbitration in the first place – refused to participate or pay necessary fees. Based on the defendant’s malfeasance, the plaintiff petitioned the court to find that “the arbitration had concluded without an award on the merits” (Williams, supra, at p. 1069). The court did so, and then vacated its own stay order so the suit could proceed.

Here, plaintiffs petition the court to affirmatively disqualify a host of arbitrators, based on facts that have not yet occurred, to either dismiss the arbitration (if it has commenced) or to prevent it from occurring (in contravention of the court’s prior order compelling it). And they base their motion on their own refusal to participate in the arbitration, rather than defendants’. The relief they seek falls well outside Williams.