California Supreme Court Parts Ways With U.S. Supreme Court, Upholding Expanded Appellate Review of Arbitration Awards By Rick E. Rayl
September 22, 2008 A recent California Supreme Court decision upholds agreements to allow judicial review of arbitration awards. The decision - which diverges from a recent U.S. Supreme Court decision - creates new options for parties entering into arbitration agreements. For many years, arbitration embodied the promise of a faster, less expensive dispute resolution alternative to the court system. With that promise, however, came the risk that the arbitrator would not follow the law, an especially troubling problem in light of the absence of any recognizable mechanism for overturning even the most egregious legal errors. Earlier this year, the United States Supreme Court ruled that no arbitration agreement - no matter how cleverly crafted - could protect against this risk. The decision held that parties to an arbitration agreement could not confer appellate jurisdiction over the merits of arbitration awards. Though the case, Hall Street Associates, L.L.C. v. Mattel, Inc. (2008) 128 S.Ct. 1396, arose under the Federal Arbitration Act, many states' schemes, including California's, contained virtually identical provisions, and conventional wisdom suggested that state courts would fall in line. This was especially true in California, where the Courts of Appeal routinely had stricken down contractual provisions designed to confer appellate jurisdiction on arbitration awards, even before the Hall Street Associates' decision. (See, e.g., Oakland-Alameda County Coliseum Authority v. CC Partners (2002) 101 Cal.App.4th 635, 645; Crowell v. Downey Community Hospital Foundation (2002) 95 Cal.App.4th 730, 735-737.) CLICK HERE TO CONTINUE |
