Lead Opinion
Opinion
A student and his parents filed this action against his school, alleging it was liable under the state’s hate crimes laws (Civ. Code, .§§ 51.7, 52.1) for death threats he received from classmates who misperceived his sexual orientation. The trial court ordered that all of the claims— the statutory hate crimes claim and several common law claims—be arbitrated in accordance with the school’s enrollment contract, which contained not only an arbitration provision but also a provision entitling the “prevailing party” to attorney fees. The arbitrator found in favor of the school on all claims and awarded it over $521,000 in arbitral expenses and attorney fees.
The primary question on appeal is whether the arbitrator could impose a type of expense on plaintiffs they would not have been required to bear if the dispute had been heard in court. We conclude that because the hate crimes laws constitute unwaivable statutory rights comparable to antidiscrimination laws, such expenses are prohibited. Otherwise, the filing of hate crimes claims would be deterred. (See Armendariz v. Foundation Health Psychcare Services, Inc. (2000)
In postarbitration proceedings, plaintiffs argued they were not liable for any type of arbitral expense they would not have had to pay in a court case. They also asserted that because the hate crimes laws authorize an award of attorney fees only to a prevailing plaintiff (see Civ. Code, §§ 52, subd. (b)(3), 52.1, subd. (h)), the arbitrator could not award attorney fees against them. We determine that although the trial court should have decided whether the arbitrator awarded such expenses and fees, the court failed to do so and found
I
BACKGROUND
The following allegations and facts are taken from the pleadings and the papers submitted in the trial court concerning the arbitration of the case.
D.C. was a student at Harvard-Westlake School (Harvard-Westlake), a private educational institution with a middle and an upper school in Los Angeles. D.C. filed this action against Harvard-Westlake and others through a guardian ad litem, his father. D.C.’s father and mother also pleaded claims in their own right. (We will refer to D.C. and his parents collectively as plaintiffs.)
A. The Original Complaint
On April 25, 2005, plaintiffs filed this action against Harvard-Westlake, the board of directors, certain officers and administrators, and a faculty member (collectively School), alleging as follows.
While a student, D.C. was pursuing a career as a singer and an actor. He had a record album with a planned release date, had broadcast a song worldwide via satellite radio, and had played the leading role in a feature film presented at an internationally acclaimed film festival. He attended HarvardWestlake’s upper school.
D.C. maintained a Web site to promote his career in entertainment. The site allowed any member of the public to post comments in a “guestbook.” Several students at Harvard-Westlake, using its computers, went to the Web site and posted death threats against D.C. and made derogatory comments about him. One post read, “I’m going to pound your head in with an ice pick.” Another said, “Faggot, I’m going to kill you.” A third stated, “You are an oversized faggot.... I just want to hit you in the neck—hard. . . . [G]o to the 405 [freeway] bridge and jump.” A fourth read, “I hate fags .... You
The students who posted the threats sought to destroy D.C.’s life, threatened to murder him, and wanted to drive him out of Harvard-Westlake and the community in which he lived. The Harvard-Westlake student newspaper, The Chronicle, ran more than one article on the matter.
When D.C.’s father read the threats at the Web site, he immediately informed Harvard-Westlake of the problem, believing that some of its students were responsible. The father also contacted the Los Angeles Police Department, which, in turn, notified the Federal Bureau of Investigation.
On the advice of the police, D.C. withdrew from Harvard-Westlake. He and his family moved to another part of California, where he went to a different educational institution. The Chronicle ran an article disclosing D.C.’s new residential location and the name of the school he was attending. The article also disclosed that postings at the Web site had referred to D.C. as a “faggot.” The faculty advisor to the staff of The Chronicle approved the article before publication. Harvard-Westlake did not suspend or expel any of the students who admitted posting the threats.
The original complaint contained 11 causes of action: negligence; assault upon another with death threats and hate crimes; conspiracy to assault another with death threats and hate crimes; invasion of privacy; conspiracy to invade the privacy of another; defamation; conspiracy to defame another; intentional infliction of emotional distress; conspiracy to inflict emotional distress on another; negligent infliction of emotional distress; and fraud in the inducement of a contract. A statutory hate crimes claim was not pleaded.
The cause of action for negligence alleged that the School had failed to provide a safe school environment (see Ed. Code, former §§ 35294.20-35294.21, added by Stats. 2002, ch. 506, § 3). The cause of action for assault upon another with death threats and hate crimes sought to impose liability on the School for permitting students to use its computers to make the threats. The related conspiracy claim accused the School of protecting the students who posted the threats in order to preserve their
In the body of the complaint, the privacy and defamation claims each alleged that D.C.’s reputation had been damaged in an amount exceeding $10 million.
The case was assigned to Judge Victor H. Person.
B. The Petition to Compel Arbitration
On May 27, 2005, the School filed a petition to compel arbitration of all claims and to stay the civil action pending the outcome of arbitration. The petition was based on the contents of Harvard-Westlake’s “Enrollment Contract,” signed by D.C.’s father.
The Enrollment Contract consisted of five pages. The heading “PERMISSION TO ENROLL” appeared at the top of the first page, followed by the recitation, “I have read, initialed and agree to the enclosed Terms & Conditions .... I accept this offer of enrollment, certify that I am the legal custodial parent and hereby enroll my child at Harvard-Westlake.” The fourth page was captioned “TERMS AND CONDITIONS.” It stated at the top: “My signature on the Enrollment Agreement and initials below affirm that I have read this statement and have accepted all of its provisions.” (Third italics added.)
Under “TERMS AND CONDITIONS,” the contract contained an arbitration provision, stating: “I understand that any legal and actionable controversy or claim arising out of or relating to this Agreement (including but not limited to the determination of the scope and applicability of this Agreement
JAMS rules, though not set forth in the contract, provided: “Each Party shall pay its pro-rata share of JAMS fees and expenses . . . , unless the Parties agree on a different allocation of fees and expenses.” The contract did not establish a different allocation.
Also under “TERMS AND CONDITIONS” was an attorney fees provision, as follows: “In the event of any arbitration or litigation between the parties arising out of this agreement, or which relates in any way to the enrollment of the student at Harvard-Westlake, the prevailing party therein shall be allowed all reasonable attorneys’ fees expended or incurred in such arbitration or litigation, to be recovered as part of the costs therein.”
The next paragraph began, “I recognize that alteration of any wording in this Agreement will nullify this offer of enrollment.” (Italics added.)
The end of the contract stated that tuition for the upcoming academic year was $21,400.
In its petition, the School argued that, based on the California Arbitration Act (Code Civ. Proc., §§ 1280-1294.2), plaintiffs’ claims were subject to arbitration, and the civil action should be stayed until the arbitration was completed. The petition was scheduled to be heard on July 12, 2005.
On June 8, 2005, plaintiffs filed a first amended complaint. The School defendants remained substantially the same.
The causes of action also underwent some changes. Nine, not 11, causes of action were alleged. The negligence claim (see Ed. Code, former
As before, the prayer for relief sought unspecified general and special damages and attorney fees and costs. The new cause of action for violation of the hate crimes laws sought injunctive relief. In the body of the first amended complaint, plaintiffs alleged that D.C.’s reputation had been damaged in an amount exceeding $10 million.
On June 28, 2005, plaintiffs filed opposition to the petition to compel arbitration. They argued; (1) D.C. was not bound by the Enrollment Contract or its arbitration provision because, as a minor, he had disaffirmed the contract; (2) the arbitrator lacked the authority to issue injunctive relief; (3) arbitration was improper as to the School because other parties (the Students) were not bound by the arbitration provision (see Code Civ. Proc., § 1281.2, subd. (c)); and (4) the arbitration provision was unenforceable on the ground that plaintiffs “would not be able to vindicate [their] statutory rights ... in the province of arbitration,” citing Armendariz, supra,
In the reply, the School argued that, after it filed the petition, plaintiffs could not amend their complaint—adding new causes of action, requests for relief, or defendants—in an effort to avoid arbitration. The School also asserted Armendariz did not preclude the arbitration of plaintiffs’ claims because that decision did not apply to the hate crimes laws.
On July 12, 2005, the day of the hearing, Judge Person provided the parties with a tentative ruling granting the petition—compelling arbitration as to the School and staying the action as to the Students. The parties presented argument. Judge Person took the matter under submission.
By minute order dated July 28, 2005, Judge Person adopted the tentative as his final ruling, concluding that the arbitration provision in the Enrollment Contract encompassed plaintiffs’ claims. The order also stated: “The Plaintiffs have tried (improperly) to amend their claims, adding claims against the parents of the students who made the allegedly offensive Web site postings. However, Plaintiffs cannot escape their obligation to arbitrate their claims against the school and school personnel simply by adding other claims and defendants. Were this the rule, arbitration agreements would be illusory. Instead the Court must simply stay those claims pending completion of the arbitration against the Harvard-Westlake Defendants.”
With respect to the peremptory challenge, Judge Person wrote: “At the commencement of the hearing on the petition, counsel inquired as to whether the Court had been made aware of a peremptory challenge pursuánt to [Code of Civil Procedure] Section 170.6. It was not aware of such a challenge as no record of the filing of a challenge in this particular case was established. If such a challenge is brought, of course, it limits the Court’s power to move forward until it has ruled on the legal sufficiency and timeliness of such a challenge. At that time the Court’s official records reflected that no such peremptory challenge had been filed in this case. Since the Court had nothing, officially, before it to rule upon, it was impossible for the Court to determine the legal sufficiency or timeliness of the alleged challenge. Under those circumstances, even though Plaintiff represented it had a service copy, the Court went forward with the hearing.
“Subsequent to taking the matter under submission in order to review the authority on the procedural issues contested by the Plaintiff during the hearing, Plaintiff’s counsel apparently returned later the same morning of the hearing with a copy of a peremptory challenge that purported to be for this matter but contained the wrong case number (BC322406 instead of BC332406). The document had apparently been filed on July 8, 2005, but was not recorded anywhere except in the record of whatever case BC322406 represents. Since the error on the face of the peremptory challenge prevented
m... m
“As to ruling on the peremptory challenge, the Court having reviewed the challenge finds it to be timely filed as to all further proceedings and legally sufficient .... The Court accepts the challenge at this time. The case file is ordered to be delivered to [the master calendar department] forthwith for the purpose of being reassigned to another [courtroom].”
On August 11, 2005, plaintiffs filed a petition for a writ of mandate with this court, challenging Judge Person’s refusal to disqualify himself before ruling on the petition to compel arbitration. Plaintiffs argued that Judge Person’s order compelling arbitration was void and should be set aside. The School filed a preliminary opposition. By order dated August 23, 2005, we summarily denied the writ petition (B185040).
C. The Arbitration
In November 2005, the arbitration commenced, the Honorable Judith M. Ryan serving as the arbitrator. The parties engaged in document productions, took 14 depositions, and retained a total of eight expert witnesses.
In May 2006, the School moved for “summary disposition” of all of plaintiffs’ claims. Plaintiffs then filed a second amended complaint, adding three causes of action: (1) breach of contract, alleging the existence and breach of a contract consisting of the Enrollment Contract, the student honor code, and the student-parent handbook; (2) “intentionally tortious conduct”; and (3) negligence. The second and third of those claims were based on the investigation of the incident.
In August 2006, the School moved for summary disposition as to all of the claims in the second amended complaint. Plaintiffs filed opposition. In October 2006, the parties presented argument on the motion.
In a ruling dated October 26, 2006, the arbitrator granted the motion in part. She dismissed the hate crimes claim, finding that a federal statute (47 U.S.C. § 230) rendered the School immune from liability for the Students’ misconduct, notwithstanding that some of the Students had used Harvard-Westlake’s computers to post the death threats.
The surviving claims—all based on the common law—were heard by the arbitrator in an evidentiary hearing held on February 12-15, 20, and 22, 2007. The parties submitted closing briefs. In May 2007, the parties presented closing arguments.
In an “Interim Award” dated May 29, 2007, the arbitrator found in favor of the School on the merits of the claims. The arbitrator explained her reasoning in a 24-page opinion. She also concluded that the School was the prevailing party for purposes of the attorney fees provision in the Enrollment Contract and reserved jurisdiction to make a final award that would include attorney fees and costs. The Interim Award was served on counsel by mail and facsimile transmission on June 1, 2007.
The School filed an application for arbitration fees, attorney fees, and costs. The application sought $508,735.53 in attorney fees and costs, and $12,492.15 in arbitration fees and costs.
Plaintiffs countered with a motion to tax costs. D.C. argued for himself only that, as a minor, he had disavowed any financial obligations relevant to the arbitration. The arbitrator agreed and did not award any fees or costs against him. D.C.’s parents took issue with some of the specifics in the School’s billing records, arguing for example that some of the attorneys’ work should have been performed by nonattomeys and that excessive time had been spent on the case. The arbitrator rejected those contentions.
In an eight-page “Final Award” dated August 20, 2007, the arbitrator ordered D.C.’s parents to pay the School a total of $521,227.68 in arbitration fees, attorney fees, and costs. In other words, the arbitrator awarded the School all of its requested arbitral expenses and attorney fees. The award was served on counsel by mail and facsimile transmission on August 24, 2007.
The School returned to the trial court, Judge Ernest M. Hiroshige presiding, and filed a petition to confirm the arbitration award. For their part, plaintiffs filed a petition to vacate the award. Each side filed an opposition to the other’s petition.
The School’s petition was straightforward: (1) Plaintiffs had agreed in the Enrollment Contract to arbitrate disputes with the School; (2) disputes subject to arbitration had arisen and had been arbitrated in accordance with the contract; and (3) the arbitrator had awarded arbitration fees, attorney fees, and costs as provided in the contract and JAMS rules.
In their petition to vacate the award, plaintiffs argued that Judge Person’s order compelling arbitration was void because he should have been disqualified (see Code Civ. Proc., § 170.6) before he issued a final ruling on the petition to compel arbitration. In the alternative, plaintiffs asserted that the award of $521,227.68 violated their rights because, under Armendariz, supra,
The petitions were heard on October 15, 2007. At the conclusion of the hearing, Judge Hiroshige granted the petition to confirm the arbitration award and denied the petition to vacate. He concluded that all of plaintiffs’ claims were arbitrable but did not rule on whether the award of arbitral expenses and attorney fees was proper. A formal order and a judgment were filed the same day. Plaintiffs appeal from the judgment.
II
DISCUSSION
Because the relevant facts are not in dispute, we independently decide the issues raised on appeal. (See Reed v. Mutual Service Corp. (2003)
Plaintiffs present three arguments. First, the peremptory challenge was timely and duly filed, rendering the order to compel arbitration void. Second, under Armendariz, supra,
We conclude, first, that the ruling on a peremptory challenge may be reviewed only by way of a petition for a writ of mandate and not on appeal from a final judgment. Plaintiffs challenged the ruling through such a petition, which we summarily denied. We therefore cannot review again whether the order compelling arbitration was void.
On the second issue, we agree that Armendariz’s prohibition of inappropriate arbitral expenses is fully applicable to plaintiffs’ hate crimes claim.
Last, on the attorney fees issue, we conclude that the hate crimes laws prohibit an award of fees to a prevailing defendant.
With respect to relief, we conclude that the trial court, on remand, should take the necessary steps to ensure that plaintiffs do not pay any inappropriate arbitral expenses or any statutorily prohibited attorney fees—a task the trial court has yet to undertake.
A. Peremptory Challenge
By statute, “[t]he determination of the question of the disqualification of a judge is not an appealable order and may be reviewed only by a writ of mandate from the appropriate court of appeal sought only by the parties to the proceeding. The petition for the writ shall be filed and served within 10 days after service of written notice of entry of the court’s order determining the question of disqualification.” (Code Civ. Proc., § 170.3, subd. (d).) This law governs the mling on a peremptory challenge (id., § 170.6). (See People v. Hull (1991)
Plaintiffs attacked Judge Person’s ruling on the peremptory challenge by filing a writ petition in this court, which we summarily denied. On this appeal from the judgment, we cannot revisit whether the judge should have disqualified himself before granting the petition to compel arbitration. (See Guedalia v. Superior Court, supra, 211 Cal.App.3d at pp. 1161-1163.) His ruling stands as valid. (Id. at pp. 1161-1162 & fn. 3.)
B. Enforcement of the Arbitration Award
In Armendariz, supra,
As Armendariz explained: “[C]ertain statutory rights can be waived .... But arbitration agreements that encompass unwaivable statutory rights must be subject to particular scrutiny. This unwaivability derives from two statutes that are themselves derived from public policy. First, Civil Code section 1668 states: ‘All contracts which have for their object, directly or indirectly, to exempt anyone from responsibility for his own fraud, or willful injury to the person or property of another, or violation of law, whether willful or negligent, are against the policy of the law.’ ‘Agreements whose object, directly or indirectly, is to exempt [their] parties from violation of the law are against public policy and may not be enforced.’ . . . Second, Civil Code section 3513 states, ‘Anyone may waive the advantage of a law intended solely for his benefit. But a law established for a public reason cannot be contravened by a private agreement.’ ” (Armendariz, supra,
After determining that the FEHA created unwaivable statutory rights, the high court concluded (1) the arbitration agreement could not limit the FEHA’s remedies; (2) the arbitration proceeding had to permit adequate
In explaining why the employer should pay the employee’s share of arbitral expenses, the court stated: “[Arbitration is supposed to be a reasonable substitute for a judicial forum. Therefore, it would undermine [the Legislature’s] intent to prevent employees who are seeking to vindicate statutory rights from gaining access to a judicial forum and then require them to pay for the services of an arbitrator when they would never be required to pay for a judge in court.” (Armendariz, supra,
The court continued: “[W]hen an employer imposes mandatory arbitration as a condition of employment, the arbitration agreement or arbitration process cannot generally require the employee to bear any type of expense that the employee would not be required to bear if he or she were free to bring the action in court. This rule will ensure that employees bringing [unwaivable statutory] claims will not be deterred by costs greater than the usual costs incurred during litigation . . . .” (Armendariz, supra, 24 Cal.4th at pp. 110-111, second italics added.) “[It has been argued that] although employees may have large [arbitration] costs, the cost of arbitration is generally smaller than litigation, so that the employee will realize a net benefit from arbitration. Although it is true that the costs of arbitration are on average smaller than those of litigation, it is also true that [the] amount awarded is on average smaller as well. . . . The payment of large, fixed [arbitration] costs, especially in the face of expected meager awards, serves as a significant deterrent to the pursuit of [unwaivable statutory] claims.” (Id. at p. Ill, citation omitted, italics added.) “We therefore hold that a mandatory employment arbitration agreement that contains within its scope the arbitration of FEHA claims impliedly obliges the employer to pay all types of costs that are unique to arbitration.” (Id. at p. 113, italics added.)
In a partial dissent in Little, Justice Baxter disagreed. Relying on an intervening decision by the United States Supreme Court (Green Tree Financial Corp.-Ala. v. Randolph (2000)
“. . . [I]nterference with the arbitration contract’s cost provisions, express or implied by statute, should be countenanced only to the degree actually necessary to assure that mandatory resort to the arbitral forum has not deterred vindication of a statutory claim. For this reason, whatever prearbitration reallocation of costs may be necessary to ensure that the claimant is not deterred in advance, this allocation should be tentative only, and should be subject to readjustment once the true expenses and rewards of the arbitral
Simply put, the dissent in Little would have required trial courts to make a case-by-case determination as to whether the arbitration proceeding would impose prohibitive expenses on the particular plaintiff, while Armendariz “categorically imposes costs unique to arbitration on employers when unwaivable rights pursuant to a mandatory employment arbitration agreement are at stake.” (Little, supra,
In the unanimous decision in Boghos v. Certain Underwriters at Lloyd’s of London (2005)
The Supreme Court reversed, stating: “[The insured] asks us to extend the holdings of Armendariz, supra,
“In any event, we have not extended the Armendariz/Little cost-shifting rule to common law claims generally. The rule is a judicially created exception to Code of Civil Procedure section 1284.2, which provides that the parties to an arbitration agreement do share costs ‘[ujnless the arbitration agreement otherwise provides or the parties to the arbitration otherwise agree . ...’ We justified our creation of the exception in Armendariz, supra,
In Gutierrez v. Autowest, Inc. (2003)
The Court of Appeal reversed and remanded. It recognized that the CLRA and the VLA confer unwaivable statutory rights (see Gutierrez, supra,
In Independent Assn, of Mailbox Center Owners, Inc. v. Superior Court (2005)
We now turn to the statutory claim here to decide whether it is subject to Armendariz’s prohibition of inappropriate arbitral expenses and, if so, whether the categorical rule or a case-by-case analysis should apply in implementing that prohibition.
1. Unwaivable Statutory Rights
“Every year, thousands of Americans are victims of . . . hate crimes. Each one of these crimes has a ripple effect in our communities. The pain and injustice of such crimes tear at the fabric of our democratic society, creating fear and tensions that ultimately affect us all. [f] Schools are not immune from such intolerance and violence. Teenagers and young adults account for a significant proportion of the country’s hate crimes—both as perpetrators and as victims. Hate-motivated behavior, whether in the form of ethnic conflict, harassment, intimidation, or graffiti, is often apparent on school grounds.” (U.S. Dept, of Education, Office of Elementary and Secondary Education Safe and Drug-Free Schools Program, Preventing Youth Hate Crime (1998) p. 1 <http://www.usdoj.gov/crs/publist.html> [as of Aug. 14, 2009].)
In 2007, the most common type of hate crime in Los Angeles County was motivated by racial, ethnic, or national origin bias (68 percent), and the
Here, plaintiffs’ hate crimes claim was based on Civil Code sections 51.7 and 52.1. At the time of the pertinent events, Civil Code section 51.7, the Ralph Civil Rights Act, provided: “All persons within the jurisdiction of this state have the right to be free from any violence, or intimidation by threat of violence, committed against their persons or property because of their race, color, religion, ancestry, national origin, political affiliation, sex, sexual orientation, age, disability, or position in a labor dispute, or because another person perceives them to have one or more of those characteristics. The identification in this subdivision of particular bases of discrimination is illustrative rather than restrictive.” (Civ. Code, former § 51.7, subd. (a), as amended by Stats. 1994, ch. 407, § 1, p. 2269.) A person aggrieved by a violation of the Ralph Civil Rights Act may bring a civil action and recover actual damages, a civil penalty of $25,000, exemplary damages, and an award of attorney fees. (Civ. Code, § 52, subds. (b), (c), as amended by Stats. 1991, ch. 839, § 2, pp. 3720-3721.)
Civil Code section 52.1, the Tom Bane Civil Rights Act, states: “(a) If a person or persons, whether or not acting under color of law, interferes by threats, intimidation, or coercion, or attempts to interfere by threats, intimidation, or coercion, with the exercise or enjoyment by any individual or individuals of rights secured by the Constitution or laws of the United States, or of the rights secured by the Constitution or laws of this state, the Attorney General, or any district attorney or city attorney may bring a civil action . . . in order to protect the peaceable exercise or enjoyment of the right or rights secured. . . .
“(b) Any individual whose exercise or enjoyment of rights secured by the Constitution or laws of the United States, or of rights secured by the Constitution or laws of this state, has been interfered with, or attempted to be interfered with, as described in subdivision (a), may institute and prosecute in his or her own name and on his or her own behalf a civil action for damages, including, but not limited to, [the same] damages [available] under [the Ralph Civil Rights Act], injunctive relief, and other appropriate equitable relief to protect the peaceable exercise or enjoyment of the right or rights secured.” (Civ. Code, § 52.1, subds. (a), (b), as amended by Stats. 2001, ch. 261, § 2.)
The legislative history of the hate crimes laws shows they were enacted for a “ ‘public reason.’ ” (Armendariz, supra,
“The second statute on which [the plaintiff’s complaint] was based, [Civil Code] section 52.1, was enacted a decade later as part of Assembly Bill No. 63 (1987-1988 Reg. Sess.) . . . and is known as the Tom Bane Civil Rights Act. It was intended to supplement the Ralph Civil Rights Act as an additional legislative effort to deter violence .... The stated purpose of the bill was ‘to fill in the gaps left by the Ralph Act’ by allowing an individual to seek relief to prevent the violence from occurring before it was committed and providing for the filing of criminal charges ....
“The Assembly Committee on Public Safety reported, ‘The Attorney General’s office states that the number of crimes which are committed because of the victim’s racial, ethnic, religious, or other minority status are increasing, that members of minority groups increasingly believe they are threatened by attack or harassment, and that existing law is inadequate to protect them. They also stated that existing civil rights statutes do little to deter hate violence because there are no criminal penalties .... The purpose of this bill is to give law enforcement officials clear effective authority to prevent acts of hate violence, and to deter such conduct by establishing serious criminal penalties’ and by ‘[a]llow[ing] an individual, or the Attorney General, district attorney, or city attorney, to bring an action to enjoin crimes of hate violence where they are threatened.’ . . .
As explained by Justice Baxter in Venegas v. County of Los Angeles (2004)
“[Civil Code] [s]ection 52.1, commonly referred to as the ‘Tom Bane Civil Rights Act’ or the ‘Bane Act,’ was enacted in 1987 as part of a renewed effort to combat the disturbing rise in ‘hate crimes,’ or, put otherwise, the rising incidence of civil rights violations motivated by hatred and discrimination. This purpose of the legislation is undeniably evidenced by both its legislative history and the case law interpreting it, including several decisions of this court.
“The Legislature’s focused effort to combat discriminatory and pernicious conduct often referred to as hate crimes began with the 1976 enactment of Civil Code section 51.7, commonly referred to as the ‘Ralph Civil Rights Act’ or the ‘Ralph Act.’ . . . The obvious purpose of the Ralph Act is to declare unlawful, and civilly actionable, any acts of violence or intimidation by threats of violence directed against any individual because of his actual or perceived membership in a minority or similarly protected class. [][]... [][]
“In this same vein, 10 years later, the Legislature enacted [the Bane Act (Civ. Code,. § 52.1),] to further address the rising tide of hate crimes in California ... .[][].. . [][]
“[The] central provisions of the Bane Act have not been substantively changed since its enactment nearly 20 years ago ....
“From its inception, the Bane Act’s purpose has been to specifically target unlawful conduct motivated by discriminatory animus that interferes with the
“The Senate Report explained . . . that under the then current law, i.e., the Ralph Act, quoted above, hate crimes perpetrated through acts of violence or threats of violence were subject to considerably expanded civil penalties .... However, due to the inadequacy of that law and the rise in hate crimes, the stated purpose of the Bane Act was to subject ‘the use of force or threats to interfere with the free exercise of one’s constitutional rights’ . . . , based on the victim’s membership or perceived membership in one of the enumerated protected classes, to both civil and criminal remedies. In other words, what the Bane Act did at its inception was to add ‘threats, intimidation or coercion’ to the already proscribed ‘violence, or threats of violence’ sanctioned under the Ralph Act, where any such conduct interferes with or attempts to interfere with the statutory and constitutional rights of persons in minority or similarly protected classes, or who were perceived by the defendant to be members of such protected classes.” (Venegas v. County of Los Angeles, supra, 32 Cal.4th at pp. 845-847 (cone. opn. of Baxter, J.), citations, fn. & some italics omitted.)
Thus, “[California’s] ‘hate crimes’ law[s] clearly establish^ that crimes motivated by bigotry and bias are against the public policy of the state.” (Webb v. Puget Sound Broadcasting Co. (1998) 1998 Wn.App. Lexis 1795, p. *9 [138 Lab.Cas.(CCH) f 58,612, p. 89,647,
In upholding a state hate crimes law against a free speech challenge under the First Amendment (U.S. Const., 1st Amend.), the United States Supreme Court explained: “[T]he Wisconsin statute singles out for enhancement bias-inspired conduct because this conduct is thought to inflict greater individual and societal harm. For example, according to the State and its amici, bias-motivated crimes are more likely to provoke retaliatory crimes, inflict distinct emotional harms on their victims, and incite community
In short, “[t]here is no question that the statutory rights established by the [Ralph Civil Rights Act and the Tom Bane Civil Rights Act] are ‘for a public reason.’ ” (Armendariz, supra,
2. Categorical Rule or Case-by-case Analysis
Armendariz adopted a categorical rule for arbitral expenses, holding that an employer must pay any type of expense unique to arbitration if the plaintiff seeks to vindicate an unwaivable statutory right. (Armendariz, supra, 24 Cal.4th at pp. 100-101, 113.) The underlying rationale for the categorical rule is to ensure that the cost of arbitration does not deter a plaintiff from bringing a claim. (Id. at p. 111.) “To be sure, it would be ideal to devise a method by which the employee is put in exactly the same position in arbitration, costwise, as he or she would be in litigation. But the factors going into that calculus refuse to admit ready quantification. Turning a motion to compel arbitration into a mini-trial on the comparative costs and benefits of arbitration and litigation for a particular employee would not only be burdensome on the trial court and the parties, but would likely yield speculative answers. Nor would there be an advantage to apportioning arbitration costs at the conclusion of the arbitration rather than at the outset. Without clearly articulated guidelines, such a postarbitration apportionment would create a sense of risk and uncertainty among employees that could discourage the arbitration of meritorious claims.” (Ibid.)
In Armendariz, supra,
In Little, supra,
And in Boghos, supra,
The Armendariz-Little-Boghos trilogy recognizes that certain rights— unwaivable statutory rights or fundamental rights delineated in constitutional or statutory provisions—are so important in our society that their enforcement should not be chilled by the threat of expenses unique to arbitration. Under Armendariz, supra,
In the present case, the public nature of plaintiffs’ statutory rights is legally indistinguishable from the nature of the rights discussed in Armendariz and Little, and plaintiffs’ rights should be equally protected.
The FEHA, at issue in Armendariz, provides a remedy for adverse employment actions taken for an improper reason: an employee’s or applicant’s “race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, age, or sexual
Little extended Armendariz to employees who are terminated in violation of “fundamental [public] policies that are delineated in constitutional or statutory provisions.” (Little, supra, 29 Cal.4th at p. 1077, italics added.) Similarly, the Tom Bane Civil Rights Act provides a remedy where a person receives threats that interfere with “the rights secured by the Constitution or laws of this state [or of the United States].” (Civ. Code, § 52.1, subd. (a).) The Tom Bane Civil Rights Act also applies to threats in the workplace. (See Stamps v. Superior Court, supra, 136 Cal.App.4th at pp. 1456-1459.)
Claims under the hate crimes laws should not be discouraged by the possibility that an alleged victim will incur arbitral expenses beyond the costs payable in court. A case-by-case analysis would simply lead to “a mini-trial on the comparative costs and benefits of arbitration and litigation for a particular [plaintiff and] would not only be burdensome on the trial court and the parties, but would likely yield speculative answers [that would deter the bringing of hate crimes claims].” (Armendariz, supra,
We acknowledge that Gutierrez, supra,
In this action, the applicable arbitration rules (JAMS) require the arbitrator to impose arbitration fees and costs on the parties on a pro rata basis. The Enrollment Contract states that the prevailing party shall be awarded attorney fees. The arbitration act (Code Civ. Proc., §§ 1280-1294.2) does not address or limit the imposition of expenses in a hate crimes dispute. Thus, the arbitration rules and the arbitration act fail to “ensure[] that [hate crimes plaintiffs] will not be deterred from pursuing their statutory claims.” (Gutierrez, supra,
We necessarily reject the School’s argument that Armendariz's prohibition of inappropriate arbitral expenses is limited to mandatory employment agreements—those imposed as a condition of employment. (See Boghos, supra,
Both Gutierrez, supra,
As Division Seven of this district observed: “[W]e see no reason why Armendariz’s ‘particular scrutiny’ of arbitration agreements should be confined to claims under FEHA. Rather, under the Supreme Court’s analysis, such scrutiny should apply to the enforcement of rights under any statute enacted ‘for a public reason.’ ” (Mercuro v. Superior Court (2002)
3. Attorney Fees
Although we have been discussing arbitral expenses up to this point, a similar analysis applies to the provision in the Enrollment Contract stating that the “prevailing party” in “any arbitration or litigation” “shall be allowed all reasonable attorneys’ fees.” “[A]n agreement to arbitrate a statutory claim implicitly incorporates ‘the substantive and remedial provisions of the statute’ so that parties to the arbitration would be able to vindicate their ‘ “ ‘statutory cause of action in the arbitral forum.’ ” ’ ” (Armendariz, supra,
The Ralph Civil Rights Act and the Tom Bane Civil Rights Act expressly provide that a court may award attorney fees only to the plaintiff. Neither act permits an award of attorney fees to a defendant, even if the defendant prevails. (See Civ. Code, §§ 52, subd. (b)(3) [“[w]hoever denies the right provided by [the Ralph Civil Rights Act] ... is liable .. .[¶].. . [¶] . . . [for] [attorney’s fees as may be determined by the court”], 52.1, subd. (h) [under Tom Bane Civil Rights Act, “the court may award the petitioner or
Further, the Legislature knows how to draft a statute to authorize an award of attorney fees to the “prevailing party”—the plaintiff or the defendant— where it so desires. For instance, under the FEHA, the party that prevails is entitled to attorney fees in the discretion of the trial court. (See Gov. Code, § 12965, subd. (b).) Although the attorney fees provision in the FEHA does not distinguish between prevailing plaintiffs and prevailing defendants, the courts treat them differently by routinely awarding fees to a prevailing plaintiff but denying fees to a prevailing defendant unless the plaintiff’s claim is unreasonable, frivolous, meritless, or vexatious. (Mangano v. Verity, Inc. (2008)
“[T]he availability of costs and attorneys fees to prevailing plaintiffs is integral to making the [hate crimes laws] an effective piece of. . . legislation, increasing the financial feasibility of bringing suits under the statute.” (Broughton v. Cigna Healthplans (1999)
The possibility of an award of attorney fees against the plaintiff in a hate crimes case would discourage such litigation. By analogy, Armendariz condemned the imposition of inappropriate arbitral expenses because they would deter the pursuit of unwaivable statutory rights. (Armendariz, supra, 24 Cal.4th at pp. 107-113.)
The one-way attorney fees provisions in the hate crimes laws serve a public purpose: to increase the financial feasibility of bringing suits under those laws. (Cf. Broughton v. Cigna Healthplans, supra,
4. Relief on Remand
This case is distinguishable from Armendariz on procedural grounds. Armendariz was decided on appeal from the denial of a petition to compel arbitration. The arbitration proceedings had not yet begun. The high court prohibited inappropriate arbitral expenses to ameliorate the deterrent effect they would have on the bringing of unwaivable statutory claims. (See Armendariz, supra, 24 Cal.4th at pp. 107-108, 111-112; Little, supra, 29 Cal.4th at pp. 1084-1085; Gutierrez, supra, 114 Cal.App.4th at pp. 95, 99-100.) In contrast, we are reviewing a confirmed arbitration award. The arbitration hearing has concluded. And the arbitrator imposed more than $521,000 in arbitral expenses and attorney fees on D.C.’s parents.
In the trial court, plaintiffs asserted in support of their petition to vacate the arbitration award that the arbitrator had imposed inappropriate arbitral costs and unauthorized attorney fees, thereby violating Armendariz, supra, 24 Cal.4th at pages 107-113, and the attorney fees provisions of the hate crimes laws. The School argued below that, under Armendariz, all of plaintiffs’ causes of action were properly sent to arbitration. The trial court adopted the School’s position and did not analyze the award of arbitral expenses or attorney fees to determine their propriety. Thus, the trial court erred by not protecting against the imposition of expenses and fees that could interfere with the vindication of unwaivable statutory rights. (See Gutierrez, supra,
In examining the arbitral expenses and attorney fees imposed by the arbitrator, “[the trial court’s] review may exceed the narrow scope envisioned
In their reply brief, plaintiffs addressed whether arbitral expenses and attorney fees could be allocated between the hate crimes claim—to which Armendariz applied—and the common law claims—to which it did not— while the hate crimes claim was part of the case. (Cf. Carver v. Chevron U.S.A., Inc., supra, 119 Cal.App.4th at pp. 502-506; Cassady v. Morgan, Lewis & Bockius LLP (2006)
Accordingly, we shall reverse the judgment and remand the case so the trial court may take the necessary steps to ensure that the arbitration award does not include (1) any expenses unique to arbitration (see Armendariz, supra, 24 Cal.4th at pp. 107-113) or (2) any attorney fees prohibited by the Ralph Civil Rights Act or the Tom Bane Civil Rights Act. Further, on remand, either side may raise allocation issues, which shall be decided below in the first instance.
Finally, the School has raised the question of whether plaintiffs waived their Armendariz argument by not presenting it to the arbitrator. Because we lack the entire record of the arbitration proceedings, we cannot resolve the waiver issue. (See pt. IC, ante.) But the Armendariz argument was raised before the trial court in plaintiffs’ petition to vacate the arbitration award.
C. Unconscionability of the Arbitration and Attorney Fees Provisions
For the first time on appeal, plaintiffs contend that the arbitration and attorney fees provisions in the Enrollment Contract are unconscionable. We have the discretion to hear a newly raised question of law that can be decided on undisputed facts appearing in the record. (See In re V.F. (2007)
“ ‘ [U]nconscionability has both a “procedural” and a “substantive” element,’ the former focusing on ‘ “oppression” ’ or “surprise” ’ due to unequal bargaining power, the latter on ‘ “overly harsh” ’ or ‘ “one-sided” ’ results .... ‘The prevailing view is that [procedural and substantive unconscionability] must both be present in order for a court to exercise its discretion to refuse to enforce a contract or clause under the doctrine of unconscionability. ’ . . . But they need not be present in the same degree .... [T]he more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.” (Armendariz, supra, 24 CalAth at p. 114, citations omitted, third italics in original.)
Plaintiffs offered no evidence concerning an “inequality of bargaining power, lack of negotiation, or lack of meaningful choice based on those circumstances.” (Crippen v. Central Valley RV Outlet (2004)
Because the record discloses no procedural unconscionability to any degree, plaintiffs’ unconscionability argument fails.
m
DISPOSITION
The judgment is reversed. On remand, the trial court shall take the necessary steps to ensure that plaintiffs do not pay any inappropriate arbitral expenses (see Armendariz v. Foundation Health Psychcare Services, Inc. (2000)
Miller, J.,
Notes
Plaintiffs renamed as defendants Harvard-Westlake, the board of directors, Thomas C. Hudnut (the headmaster), Harry L. Salamandra, Jr. (the head of the upper school), and Kathleen Neumeyer (the faculty advisor to the staff of The Chronicle). Respondents consist of these defendants, excluding Neumeyer.
The federal law states that “[n]o provider ... of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” (47 U.S.C. § 230(c)(1).)
Our recitation of the background of the case should not be interpreted as a tacit approval of the arbitrator’s decisions or of plaintiffs’ implicit position that D.C.’s parents had standing to bring a claim under the hate crimes laws.
“Arbitral expenses” may include the arbitrator’s compensation and travel expenses, the cost of renting a hearing room, and a fee to postpone a scheduled hearing. (See, e.g., Gonzalez v. Menard, Inc. (N.D.I11. 2008)
In their appellate briefs, the parties did not address whether the ruling on a peremptory challenge may be reviewed on appeal. We requested and received supplemental briefing on the issue.
In 1984, the Ralph Civil Rights Act was amended to include sexual orientation as a protected characteristic. (See Stats. 1984, ch. 1437, § 1, p. 5037.)
The Enrollment Contract, which contained the arbitration provision, required one of the student’s parents to read and accept all of the contract’s terms and conditions without “alteration of any wording.”
Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
Dissenting Opinion
The majority concludes that under Armendariz v. Foundation Health Psychcare Services, Inc. (2000)
“Failure to raise [a claim of illegality] before the arbitrator . . . waives the claim for any future judicial review.” (Moncharsh v. Hetty & Blase (1992)
For the foregoing reasons, I respectfully dissent.