*1 Dist., B158570. Second Div. One. Jan. [No. 2004.] al., ROBERT GARCIA et Plaintiffs Respondents, DIRECTV, INC., al., et Defendants Appellants.
Counsel Oliver, Dale H. Michael Ernest Emanuel Oliver &
Quinn Hedges, Urquhart C. Graham for Defendants Appellants. Williams and Tiffany Smith, Stewart, Jensen; Budd, Steve B. McKool Baron & Allen M. Adler; O’Neill, Sun, Leclair, Brian C. Lysaght, & Lysaght Lewis T. Jill for Plaintiffs and Respondents. and Noah B. Salamon Yolanda Orozco Opinion waiver, action (Miriam In the absence of a class A.),
VOGEL J. in our and vests jurisdiction classwide arbitrations California law authorizes a case that determine whether in a particular approach “offer[s] trial courts to efficient, better, (Keating than the alternatives. more and fairer solution” 360, 584, 645 P.2d 613 (1982) Cal.Rptr. Court 31 Cal.3d [183 (1984) 465 Keating in Southland 1192], reversed on another ground Securities, 1, 852]; v. Prudential-Bache 104 S.Ct. Lewis U.S. 1 L.Ed.2d [79 69]; Country v. Mesquite (1986) Cal.Rptr. Inc. 935 Cal.App.3d 179 [225 Izzi 1309, 315].) Until (1986) Cal.Rptr. 186 1319-1322 Club Cal.App.3d [231 Federal rules to arbitrations governed we these last year, applied v. Superior et Blue Cross (9Act U.S.C. seq.; Arbitration § California Kinko’s, 779]; Sanders v. (1998) Cal.Rptr.2d 67 Cal.App.4th Court [78 766])—but no 1113-1114 Cal.Rptr.2d Inc. 99 Cal.App.4th issue—whether has and the foundational spoken, longer. (in FAA class arbitrations—must prohibits arbitration agreement particular arbitrators, Tree courts. not the be decided cases) henceforth S.Ct. L.Ed.2d U.S. 444 Financial Corp. Bazzle
FACTS DIRECTV, Inc. home satellite television digital through services provides dealers, Garcia, (Robert network of one of whom later independent joined included Garcia) others in our references to filed a Demand “Class Action Arbitration” with the American Arbitration Association to resolve claims his DIRECTV. Garcia and DIRECTV are bound DIRECTV’s standard *3 Sales Agency and that Agreement, agreement includes arbitration provi- heard, sion. Before the arbitration was Garcia filed this class action lawsuit DIRECTV (and its which in turn moved to parent corporation), arbitration. In compel (not the trial court found that it April arbitrator) would determine class action issues the threshold (including issue about whether classwide arbitration is the terms of prohibited by DIRECTV’s agreement), found that classwide arbitration is not prohibited, and granted DIRECTV’s motion to arbitration. compel us, In previous before we relied on Blue proceedings Cross of California Court, supra, affirmed the trial court’s order. Cal.App.4th DIRECTV, (Garcia 11, 2002, (Dec. Inc. B158570) The [nonpub. opn.].) review, California Court denied Supreme DIRECTV’s but the petition United States certiorari, Court Supreme granted its for a writ of petition vacated our judgment, held this case its resolution of Green Tree pending Bazzle, Financial Corp. v. U.S. supra, 539 and then remanded the cause to us for further consideration in of Green light Tree. We invited further and set the briefing matter for hearing.
DISCUSSION A. in Green Tree plaintiffs Bazzle) and Burt obtained a home (Lynn documents, loan from Green Tree and improvement in the loan agreed, resolve any by arbitration under the FAA. Green Tree disputes apparently notices, failed to certain consumer provide and the Bazzles thereafter sued court, Green Tree in state then asked the court to their certify claim as a class action. In Green Tree moved to response, arbitration. The trial court compel motions, action, granted both certified the class arbitration. compelled held, The arbitration was and the hearing $10 arbitrator awarded more than million to the class. The trial court confirmed the award. The South Carolina affirmed, Court that the Supreme holding loan documents were silent in to class regard and that they authorized classwide consequently Bazzle, arbitrations. Tree Financial Corp. v. U.S. at supra, 539 2405-2406].) S.Ct. at p. pp. Court, Green Tree posed
In its to the United States Supreme petition FAA, whether, under the an arbitration clause silent as class issue as class arbitration. under state law to permit arbitration could be interpreted (Green Tree Financial U.S. at S.Ct. at p. Bazzles’ case and in (in certiorari 2404].) The Supreme granted p. held that court), to the then high another case that had followed a similar road is, forbids class the agreement the foundational question—that court, and that the be decided arbitration—had to and the thus had to be vacated Carolina Court’s judgment South the arbitrator: matter remanded to claims, or to submit to the arbitrator disputes,
“The parties agreed ‘[a]ll to this contract or relating relationships controversies from arising . . . And the about what which result from this contract.’ dispute (i.e., whether it forbids use arbitration contract in each case means and the to this contract’ ‘relating class arbitration procedures) that an to have agreed Hence the seem resulting ‘relationships.’ *4 arbitrator, And if the relevant not a would answer judge, question. [Citation.] ‘ of arbitrable that matter—about “scope there is doubt about ’ ‘ that doubt “in favor of arbitration.” issues” ’—we should resolve [Cita- tion.] circumstances, that the intended courts assume parties
“In certain limited courts, arbitrators, (in the arbitration-related matter to decide a particular not the contrary). and evidence to absence of [Citation.] unmistakable]’ ‘clea[r] ‘contracting instances matters of a kind that limited involve These typically include decide. They have a court’ to likely would expected [Citation.] parties matters, have a valid arbitration whether the certain such as gateway parties arbitration clause applies whether a concededly binding at all or agreement a certain of controversy. type [Citations.] forbid class arbitration—does here—whether the contracts
“The question of validity It concerns neither fall into this narrow exception. not between underlying nor its dispute arbitration clause applicability wanted a or judge not whether is parties parties. question [T]he the matter. to arbitrate they agreed to decide [Citation.] proceeding here what kind arbitration the relevant Rather question of or judicial a state statute does not concern to. That agreed question parties proce- and arbitration It concerns contract interpretation procedures [citation]. these Given question. to answer Arbitrators are well situated dures. con- considerations, language contracts’ sweeping with the arbitration along arbitration, this matter committed to of the cerning scope questions courts, to decide. should be for contract interpretation Bazzle, U.S. at supra, Financial (Green Corp. Tree p. [Citation.]” S.Ct. at p. B. The arbitration in Green Tree that: provided “ claims, ‘ARBITRATION—All or controversies from or disputes, arising to this contract or the relating which result from this contract relationships . . . shall be resolved arbitration one by binding arbitrator selected us with consent you. This arbitration contract is made to a transac- pursuant commerce, in tion interstate and shall be governed Federal Arbitration Act at U.S.C. . . section 1 . . THE PARTIES VOLUNTARILY AND TRIAL, KNOWINGLY WAIVE ANY RIGHT THEY HAVE TO A JURY EITHER TO PURSUANT ARBITRATION UNDER THIS CLAUSE OR (AS HEREIN)____ PURSUANT TO COURT ACTION BY US PROVIDED and agree understand the arbitrator shall have all powers the law and the contract. These shall include all provided powers legal remedies, to, but not limited equitable including, money damages, declaratory ” relief, relief.’ Tree injunctive Financial 2405], Court, 539 U.S. at at p. S.Ct. italics added p. by Supreme in capitalization original.)
The arbitration in DIRECTV’S agreement provides: “18.12 ARBITRATION.
“(a) or Any claim out of the arising interpretation, performance, breach of this Agreement, without limitation including claims fraud alleging inducement, in the shall be resolved at the only by binding *5 of either American in accordance with the rules of the request party, Association, be, Arbitration as herein The arbitrators shall provided. modified available, to the fullest extent either retired or selected from a judges of panel trained and the persons in area of the asserted expert subject claims. If the $250,000, claim seeks of than damages less it shall be decided one by cases, arbitrator. In all other each shall select one who shall party select the third jointly arbitrator. If for reason a third any arbitrator is not made, selected within one month after the claim is first the third arbitrator shall be selected in accordance with the rules of the American Arbitration Association. The arbitrators shall California substantive the law to apply to the extent proceeding, Federal substantive law would to except any apply claim. The arbitration be shall conducted in Los Califomia. An Angeles, award may be entered who fails to at a noticed party appear duly The arbitrators hearing. shall in and to the an prepare writing provide parties award factual and the including findings reasons on which their decision is based. The arbitrators shall not have to commit errors law or power of and the legal reasoning, may award be vacated or corrected on to a appeal court such error. The of the competent jurisdiction any decision of for and a final in court judgment any
arbitrators be entered enforced as of may The shall the arbitrator’s fees jurisdiction. share competent equally other of the and costs arbitration. not
“(b) following shall be to foregoing, subject Notwithstanding by arbitration and be the Los Califor- may adjudicated only Angeles County, for District nia Court or the U.S. District Court the Central of . . . to ... of DIRECTV’s any relating validity California: [][] or of DIRECTV’s Trade Secrets or to offer to right public any [its service] Marks; and either for or party preliminary permanent request [f] relief, relief such mandatory, or or injunctive prohibitive provisional of as writs attachments or possession. be
“(c) any gov- This Section and arbitration conducted hereunder shall (9Act U.S.C. et erned the United States Arbitration Section seq.) that transactions this parties acknowledge contemplated by Agreement commerce, as defined This Section 18.12 shall survive involve in said Act. (Italics added.)1 the termination or of this expiration Agreement.” C. there current are not DIRECTV tells us The parties’ positions surprising. that to talk about—that Green Tree is it is nothing dispositive, to decide whether DIRECTV’s arbitration forbids class arbitrator arbitrations, order be vacated with directions to the trial court’s must to out that his disagrees, remand matter the arbitrator. Garcia pointing Tree, that the unlike the one before the court in Green provides agreement, not have the to commit errors law legal “arbitrators shall power Garcia, the arbitrator a remand for decision reasoning.” According the trial would be subject would be decision superfluous—because error had committed an to determine whether court’s review decided that already and the trial court—which has legal law or reasoning, necessarily does forbid class action arbitrations—would this Garcia’s imperfect to the We contrary. reject vacate arbitral decision be that the issue must decided with DIRECTV agree syllogism *6 arbitrator.
First, a made in the first Green Tree mandates decision quite plainly arbitrator, not a made the trial court and by imposed the decision instance 1 Tree agreement agreement clearly Green nor DIRECTV’s undisputed It is that neither not) might (but might again otherwise analysis that then preliminary forbids class Bazzle, (Green supra, 539 U.S. court, Corp. Tree v. Financial by the not the arbitrator. be made Management Personnel Texas 2406]; Pedcor v. Nations p. at but at 450 S.Ct. see p. [123 of 355, (5th 359-360.) 2003) F.3d Cir. 343
303 Bazzle, Tree Financial Corp. supra, on the arbitrator. U.S. at 539 p. see also Pedcor v. Nations Management 2407-2408]; S.Ct. at pp. [123 Texas, Personnel supra, of Green Tree’s 343 F.3d at p. clarity [“The of holding—that arbitrators are to decide whether an arbitration supposed forbids or allows class agreement arbitration—leaves us to decide only to Green Tree to come whether the instant case is sufficiently analogous rule”].)2 within its
Second,
the difference between DIRECTV’S
and the one before
agreement
Court defeats
rather
than
Garcia’s
supports
argument.
mandate
to decide this case without
errors of law
committing
or legal
and the concomitant
that “the
reasonig,
award
be
may
vacated or corrected on
to a court of
appeal
competent
jurisdiction
any
error,”
such
review of the
plainly contemplate
judicial
arbitrator’s decisions
law,
not
advice
judicial
about how such decisions
should be made.
Third,
(as
Garcia’s
on)
shown
the cases he relies
approach
assumes the
novo,
trial court’s review of the arbitrator’s decision will be de
apparently
based on the further
the arbitrator will decide the issue
assumption
Mayhew
Benninghoff
on the basis of
entirely
(See
declarations.
(1997) 53
1365,
Marcus &
Real Estate
Millichap
27];
Cal.App.4th
Cal.Rptr.2d
Investment
Co. v. Hock
Brokerage
Investment Co.
83,
(1998)
68 Cal.App.4th
But
Cal.Rptr.2d
Garcia offers neither
nor
authority
explanation
law,
for these assumptions—no
case
no rules of the American Arbitration
Association,
no discussion
about custom and
we
usage3—and
decline his
2 As
explains,
Pedcor also
the preemptive effect of the
parties’ agreement
FAA overrides the
(in
case)
our
that the “arbitrators shall apply
proceeding”
California substantive law to the
that,
law,
makes it immaterial
under California
class arbitration issues would be decided
(Pedcor
Texas,
the court rather than
Management
the arbitrator.
v. Nations Personnel of
362.)
p.
invitation to decide this issue manner, leaving different the threshold issue in a arbitrator decide might the review to be applied about the standard of another a decision day for 4 court. trial
DISPOSITION reversed, 17, 2002, remanded to the is and the cause is The order of April the matter to the arbitrator. directions to remand trial court with costs of are to their own appeal. pay J.,P. concurred.
Spencer, result, this which is to send ORTEGA, J., I concur with Concurring. for the it can it to the arbitrator process to the trial court so send matter back begin. that end. This should we are way accomplishing I with disagree to following Award’). (the stay proceedings all The arbitrator shall class ‘Clause Construction any party days permit to period for a of at least 30 the Clause Construction Award issuance of Construction or to vacate the Clause competent jurisdiction to confirm to move a court of stay they writing during period of the parties inform the arbitrator in Award. Once all Award, requisite Construction or once the judicial seek review of the Clause do not intend to so, that it has done any having informed the arbitrator period expires party time without in the Clause Construction may the arbitration on the basis stated proceed arbitrator with sought judicial that it has period provided within the any party Award. If informs them, is review, until the arbitrator stay part or some may proceedings, the arbitrator further court, clause, the construing applicable arbitration ruling In informed of the [ft] Rules, any AAA other Supplementary the existence of these not consider arbitrator shall rules, on a proceed the arbitration to against permitting of or be a factor either in favor 7, of Jan. [as JSPssid=15753&JSPaid=43408> (<http://www.adr.org/index2.Ljsp? class basis.” 4 waiver, that, arbitration is a classwide the notion absent class action Implicit in is Bazzle (Green Tree Financial yet say has that is so. Court proper under the FAA—but issues, fact, 2402.) are a number of unresolved In there supra, 123 S.Ct. v. (See are unconscionable. that class action waivers including arising out of claims those Court, right proceeding to a classwide p.at Keating Superior 31 Cal.3d 609 [“If through the contracts relationships governed adhesion automatically eliminated in could be undercutting that favor principles for potential [the of a inclusion group, would actions], of interests common to chilling protection the effective and for class substantial,” “may have the appropriate it action in cases where and denial of class be conduct]; wrongful the benefits of its wrongdoer” to retain allowing unscrupulous effect of 1094, Cal.Rptr.2d [class Cal.App.4th 862] 1099-1102 v. Discover Bank Szetela (9th 2003) fn. 14 unconscionable]; F.3d Ting AT&T Cir. action waiver against its file a class action large like AT&T would any company is no chance [“there unconsciona may dispositive” of the do so is not company that “the and the fact customers” 1175-1176; Stores, 2003) (9th issue]; City Cir. 328 F.3d Ingle Inc. bility v. Circuit may 1071.) be (C.D.Cal. 2002) Some of these issues F.Supp.2d v. AT&T Wireless Lozano Cal.Rptr.2d Cal.App.4th in Discover Bank addressed 9, 2003, 393], granted, S113725. April review *8 Rather, not be a reversal. we should dismiss the since the order appeal, from was the trial court not ruled on “appealed” interlocutory, having fully the matters that were before it. The under Green Tree with charged instance, with matters in the first has never seen responsibility dealing this case. Accordingly, the matter is at least two removed from being steps for our ready review.
I also disagree with our issuance of an much less one. opinion, published The history this case calls for more than our nothing issuance of an order dismissing the matter to the trial court with a appeal sending citation to Green Tree. Unfortunately, carries with it the majority opinion implica- tion that the trial judge reading Green Tree and it incapable following without some from us. I think amplification otherwise. with problem issuing is that it to make certain opinion purports
determinations before such matters have been before the fully litigated arbitrator and reviewed (See the trial court. from the e.g., majority “the difference opinion: between DIRECTV’S and the one before defeats rather than Garcia’s argument” and supports “[the agreement’s provisions] plainly judicial review of the arbitrator’s contemplate are, all, .”) decisions of law . . . We after a court of review and should not be deciding matters until are they before us. properly