BILL ANALYSIS Ó
------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 1062|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: AB 1062
Author: Dickinson (D)
Amended: 6/20/11 in Senate
Vote: 21
SENATE JUDICIARY COMMITTEE : 3-2, 6/28/11
AYES: Evans, Corbett, Leno
NOES: Harman, Blakeslee
ASSEMBLY FLOOR : 42-29, 5/26/11 - See last page for vote
SUBJECT : Arbitration: appeals
SOURCE : California Employment Lawyers Association
Consumer Attorneys of California
DIGEST : This bill amends existing law which provides
that an appeal may be taken from an order dismissing or
denying a petition to compel arbitration, to provide that
an immediate appeal may be taken from an order dismissing
or denying a petition to compel arbitration only if the
arbitration is for the adjudication of a dispute over the
terms of a public or private sector collective bargaining
agreement or memorandum of understanding.
ANALYSIS : Existing law governs arbitrations in
California, including the enforcement of arbitration
agreements, rules for neutral arbitrators, the conduct of
arbitration proceedings, and the enforcement of arbitration
awards. (Code Civ. Proc. Sec. 1280 et. seq.)
CONTINUED
AB 1062
Page
2
Existing law provides that an "agreement," for the purposes
of arbitration, includes but is not limited to agreement
providing for valuations, appraisals, and similar
proceedings and agreements between employers and employees
or between their respective representatives. (Code Civ.
Proc. Sec. 1280(a).)
Existing law provides that a written agreement to submit to
arbitration an existing controversy or a controversy
thereafter arising is valid, enforceable and irrevocable,
save upon such grounds as exist for the revocation of any
contract. (Code Civ. Proc. Sec. 1281; see also Federal
Arbitration Act, 9 U.S.C. Sec. 2.)
Existing law provides that on a petition of a party to an
arbitration agreement alleging the existence of a written
agreement to arbitrate a controversy and that a party
thereto refuses to arbitrate such controversy, the court
shall order arbitration of the controversy if it determines
that an agreement to arbitrate the controversy exists,
unless it determines any of the following:
The right to compel arbitration has been waived by the
petitioner.
Grounds exist for the revocation of the agreement.
A party to the arbitration agreement is also a party to a
pending court action or special proceeding with a third
party, arising out of the same transaction or series of
related transactions and there is a possibility of
conflicting rulings on a common issue of law or fact.
(Code Civ. Proc. Sec. 1281.2(a)-(c).)
Existing law provides that an aggrieved party may appeal
from the following:
An order dismissing or denying a petition to compel
arbitration.
An order dismissing a petition to conform, correct or
vacate an award.
An order vacating an award unless a rehearing in
CONTINUED
AB 1062
Page
3
arbitration is ordered.
A judgment entered pursuant to this title.
A special order after final judgment. (Code Civ. Proc.
Sec. 1294(a)-(e).)
Existing law provides that a writ of mandate may be issued
by any court to any inferior tribunal, corporation, board,
or person, to compel the performance of an act which the
law specially enjoins, as a duty resulting from an office,
trust, or station, or to compel the admission of a party to
the use and enjoyment of a right or office to which the
party is entitled, and from which the party is unlawfully
precluded by that inferior tribunal, corporation, board, or
person. (Code Civ. Proc. Sec. 1085(a).)
Existing law provides that a party may not appeal an order
compelling arbitration until after final judgment, but may,
under extraordinary circumstances, seek a writ of mandate
to request review of the ruling by the court of appeal in
advance of the arbitration hearing. ( Laufman v. Hall-Mack
Co. (1963) 215 Cal.App.2d 87; United Firefighters of Los
Angeles v. City of Los Angeles (1991) 231 Cal.App.3d 1576;
Mid-Wilshire Associates v. O'Leary (1992) 7 Cal.App.4th
1450; Bertero v. Superior Court (1963), 216 Cal.App.2d
213.)
This bill provides that an aggrieved party may immediately
appeal from an order dismissing or denying a petition to
compel arbitration if the arbitration is for adjudication
of a dispute over the terms of a public or private sector
collective bargaining agreement or memorandum of
understanding.
This bill makes other technical, non-substantive changes.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 6/28/11)
California Employment Lawyers Association (co-source)
Consumer Attorneys of California (co-source)
CONTINUED
AB 1062
Page
4
California Advocates for Nursing Home Reform
Congress of California Seniors
Consumer Federation of California
The Legal Aid Society-Employment Law Center
OPPOSITION : (Verified 6/28/11)
Association of California Healthcare Districts
Association of California Insurance Companies
Californians Allied for Patient Protection
California Assisted Living Association
California Association of Health Facilities
California Association of Professional Liability Insurers
California Automotive Business Coalition
California Building Industry Association
California Business Properties Association
California Chamber of Commerce
California Chapter of the American Fence Association
California Farm Bureau Federation
California Fence Contractors Association
California Grocers Association
California League of Food Processors
California Manufacturers and Technology Association
California Retailers Association
Chambers of Commerce Alliance of Ventura & Santa Barbara
Counties
Civil Justice Association of California
Engineering Contractors Association
Flasher Barricade Association
Marin Builders Association
Personal Insurance Federation of California
Simi Valley Chamber of Commerce
TechAmerica
TechNet
ARGUMENTS IN SUPPORT : According to the author, "Ŭt]his
bill eliminates the current right to appeal from an order
denying a petition to compel arbitration. Current law in
this specific area is an anomaly in that it violates the
legal principle that appeals may only be taken once a final
judgment is rendered. The existence of this anomaly has
been exploited by parties to unnecessarily delay the
judicial process, causing great harm to aggrieved parties."
CONTINUED
AB 1062
Page
5
A co-sponsor of this bill, the California Employment
Lawyers Association writes, "Currently, a party whose
motion to compel arbitration is denied by a trial court can
file an immediate appeal as a matter of right and use the
processes of the Courts of Appeal to stall the case for
years. By limiting the right of review to those matters
sufficiently compelling to persuade the Court of Appeal to
grant a discretionary writ of mandate, this bill would save
the Courts of Appeal time and money. Further, it would
prevent needless and oppressive stalling techniques
routinely employed by stronger parties seeking to impose
unfair arbitration provisions on working families and
ordinary citizens.
"Forced arbitration increasingly is being used by employers
to strip employees of important rights which would be
protected if their claims were heard in a court of law.
Arbitration usually is conducted in secret, without any
requirement to follow state or federal law, and provides
almost no opportunity for meaningful review. While
voluntary agreements to arbitrate an existing dispute may
be appropriate between parties on equal footing, provisions
in take-it-or-leave-it form agreement that force
arbitration on workers, consumers and other vulnerable
parties are not. Workers and others who sign agreements
containing forced arbitration provisions almost never
understand the true legal significance of the clauses. And
even if they did, they would have no choice but to sign. .
. .
"ŬThe existing] system clearly is unfair to the worker
whose case is being delayed, both because justice is
delayed and because witnesses and evidence may be lost
through the passage of time. It is also unfair to the
defendant's law-abiding competitors, whose employment
practices do not engender claims; and it is unfair to the
voting public, which has a right to see its substantive
laws enforced rather than stalled."
ARGUMENTS IN OPPOSITION : In opposition to the bill, the
Civil Justice Association of California writes, "This bill
would allow a person who voluntarily signed an agreement to
arbitrate any future dispute to sue anyway. And if they do
sue anyway, the other person would be prohibited by AB 1062
CONTINUED
AB 1062
Page
6
from appealing a court's decision to allow that decision to
proceed.
"ŬAB] 1062 was recently amended and now only ensures the
right of appeal for unions with arbitration agreements.
Creating different enforcement mechanisms for unions and
not for others is an illogical distinction. Like any other
contract, parties' should be encouraged to adhere to
contractual obligations freely entered into.
"Arbitration and mediation provisions work well in many
areas of law. The cost and time savings of arbitration
offer considerable benefits to both parties. In lieu of
going to trial, using arbitration to settle a dispute is a
widely accepted, faster, and less-costly alternative to the
court system."
Also in opposition, the California Assisted Living
Association (CALA) states, that "Ŭw]ithout a right to
appeal the denial or dismissal of a petition to compel
arbitration, an aggrieved party must either go through the
entire trial and then appeal after final judgment - a
scenario that completely deprives him of the benefits of
the arbitration agreement - or petition for a writ - a
discretionary review that is commonly denied. In essence,
without the right of direct appellate review, an aggrieved
party has no viable means to enforce the arbitration
agreement. By the time final judgment is entered, the
party will have already fully litigated the case in court,
the very thing parties agreed not to do." CALA argues that
the bill "would adversely impact Assisted Living
communities because many such communities are parties to
arbitration agreements."
The California Chamber of Commerce, states, "?while appeals
by right can extend the time necessary to resolve disputes
over the validity of the arbitration agreement, it does not
necessarily result in a faster resolution of the primary
dispute between the parties. As such, eliminating access
to this important procedural mechanism will merely
undermine protections for employers and the enforcement of
valid arbitration clauses, increasing the number of
non-meritorus claims that can receive a full trial.
CONTINUED
AB 1062
Page
7
"In addition, arbitration proceedings are not merely
preferred by employers. A study conducted by the American
Bar Association found arbitration litigants were more
satisfied than those involved in lawsuits. . . .
"Finally, despite assertions by the author, a discretionary
writ of mandate is an inadequate procedural protection for
employers. Unlike an appeal, a writ of mandate is an
extraordinary remedy requiring an appellate court to compel
a lower court to take a specified action. Appellate courts
are under no obligation to review the trial court decision,
and if they do so, the lower court's ruling will only be
reversed through a writ if the trial court has abused its
discretion, regardless of the merits of the claim."
ASSEMBLY FLOOR :
AYES: Alejo, Allen, Ammiano, Atkins, Beall, Block,
Blumenfield, Bonilla, Bradford, Brownley, Butler, Campos,
Carter, Chesbro, Dickinson, Eng, Feuer, Fong, Fuentes,
Furutani, Gatto, Gordon, Hayashi, Roger Hernández, Hill,
Hueso, Huffman, Lara, Bonnie Lowenthal, Ma, Mendoza,
Monning, Pan, V. Manuel Pérez, Portantino, Skinner,
Swanson, Torres, Wieckowski, Williams, Yamada, John A.
Pérez
NOES: Achadjian, Bill Berryhill, Conway, Cook, Donnelly,
Fletcher, Beth Gaines, Galgiani, Garrick, Grove, Hagman,
Halderman, Harkey, Huber, Jeffries, Knight, Logue,
Mansoor, Miller, Morrell, Nestande, Nielsen, Norby,
Olsen, Perea, Silva, Smyth, Valadao, Wagner
NO VOTE RECORDED: Buchanan, Charles Calderon, Cedillo,
Davis, Gorell, Hall, Jones, Mitchell, Solorio
RJG:do 6/30/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
CONTINUED