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Business Transactions

Arbitration Agreements

July 18, 2023 Update:

The California Supreme Court response to the U.S. Supreme Court decision Viking River Cruises, Inc. v. Moriana (2022) 596 U.S. __ [142 S.Ct. 1906] (Viking River), was issued July 17, 2023.  The California Supreme Court held in Erik Adolph V. Uber Technologies, Inc. (July 2023,  S274671) the following:

In Viking River Cruises, Inc. v. Moriana (2022) 596 U.S. __ [142 S.Ct. 1906] (Viking River), the United States Supreme Court considered a predispute employment contract with an arbitration provision specifying that “in any arbitral proceeding, the parties could not bring any dispute as a class, collective, or representative PAGA action. It also contained a severability clause specifying that if the waiver was found invalid, any class, collective, representative, or PAGA action would presumptively be litigated in court. But under that severability clause, if any ‘portion’ of the waiver remained valid, it would be ‘enforced in arbitration.’ ” …

In so holding, the high court declared that the FAA “preempted” a separate state law rule that “PAGA actions cannot be divided into individual and non-individual claims” where the parties have agreed to arbitrate individual claims. (Viking River, at p. __ [142 S.Ct. at p. 1913].) …

In May 2022, Uber filed a petition for review. Before Adolph could file an answer, the United States Supreme Court decided Viking River, which abrogated in part our decision in Iskanian, ,..(Viking River, supra, 596 U.S. at pp. __–__ [142 S.Ct. at pp. 1923–1925].) Viking River also considered the standing question at issue in this case. (Id. at p. __ [142 S.Ct. at p. 1925].) We granted review to provide guidance on statutory standing under PAGA…

Because “[t]he highest court of each State . . . remains ‘the final arbiter of what is state law’ ” (Montana v. Wyoming (2011) 563 U.S. 368, 378, fn. 5), we are not bound by the high court’s interpretation of California law. (See Viking River, supra, 596 U.S. at pp. __–__ [142 S.Ct. at p. 1925] (conc. opn. of Sotomayor, J.) [“Of course, if this Court’s understanding of state law is wrong, California courts, in an appropriate case, will have the last word.”].) And although the high court’s interpretations may serve as persuasive authority in cases involving a parallel federal constitutional provision or statutory scheme (cf., e.g., Raven v. Deukmejian (1990) 52 Cal.3d 336, 353; People v. Teresinski (1982) 30 Cal.3d 822, 835–836), Viking River does not interpret any federal provision or statute similar to PAGA.

HELD:

Under the statute, a plaintiff who files a PAGA action with individual and non-individual claims does not lose standing to litigate the non-individual claims in court simply because the individual claims have been ordered to arbitration.

 

April 12, 2023 Update:

District Attorney Alvin L. Bragg, Jr. filed an action in the United States District Court, Southern District of New York, in response to an
“unprecedently brazen and unconstitutional attack” led by Jim Jordan in Congress on the ongoing New York State criminal prosecution and investigation of former President Donald J. Trump.

April 4, 2023 Update:

One Arbitration Agreement started out small and ended up as the beginning of an indictment of Donald Trump.  On April 4, 2023, in Manhattan, the SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK, No. 71543-23, Donald Trump pleaded not guilty to 34 felony counts of falsifying business records.

The case Stormy Daniels v. Donald Trump filed in Los Angeles Superior Court on March 6, 2018, which reportedly involves arbitration provisions, requested the court to grant a judgment against the defendant and to declare no agreement was formed or the agreement is void, invalid and unenforceable.

On August 21, 2018, in Manhattan, the United States District Court, Southern District of New York, United States v Michael Cohen,  Michael Cohen pleaded guilty , to criminal charges involving the $130,000 payment to Stormy Daniels. In Mr. Cohen’s guilty plea statement in open court he admitted the payment was made “in coordination with and at the direction of the same candidate” as was the the $150,000 paid to Karen McDougal, which was “in coordination with and at the direction of a candidate for federal office,” and “for the principal purpose of influencing the election.” Mr. Cohen’s attorney, Lanny Davis, identified the candidate as Donald Trump.

 

September 12, 2018 Update:

On May 21, 2018, the U.S. Supreme Court decision, EPIC SYSTEMS CORPORATION v. JACOB LEWIS (No. 16–285), addressed arbitration agreements, the Federal Arbitration Act (FAA) and the National Labor Relations Act (NLRA).

GORSUCH, J., delivered the opinion of the Court, in which ROBERTS, C. J., and KENNEDY, THOMAS, and ALITO, JJ., joined. GINSBURG, J., filed a dissenting opinion, in which BREYER, SOTOMAYOR, and KAGAN, JJ., joined.

Below are excerpts from Justice Gorsuch’s opinion: