Bill Text: CA SB1078 | 2015-2016 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Civil procedure: arbitration.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Vetoed) 2016-11-30 - Last day to consider Governor's veto pursuant to Joint Rule 58.5. [SB1078 Detail]

Download: California-2015-SB1078-Amended.html

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BILL NUMBER: SB 1078	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 4, 2016

INTRODUCED BY   Senator Jackson

                        FEBRUARY 17, 2016

   An act to amend  Section 1280 of   Sections
1281.85 and   1281.9 of, and to add Section 1281.65 to,
 the Code of Civil Procedure, relating to arbitration.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1078, as amended, Jackson. Civil procedure: arbitration.
   Existing law governs arbitration in civil proceedings. Under
existing law, a neutral arbitrator is defined as one who is selected
jointly by the parties or by the parties' arbitrators, or is
appointed by the court if the parties or their arbitrators cannot
jointly select an arbitrator.  Existing law provides that a
party to an arbitration includes the party seeking to arbitrate the
agreement, a party against whom arbitration is sought, or a party who
is made a party by any of the parties to an agreement, including the
arbitrator. Existing law also provides that a written arbitration
agreement includes a written agreement that is extended or renewed by
an implied or oral agreement.   Existing law requires a
person selected to   serve as a neutral arbitrator to
disclose all matters that could cause a person aware of the facts to
reasonably entertain a doubt that the proposed neutral arbitrator
would be able to be impartial. Existing law requires the disclosure
to include, among other things, whether or not the proposed neutral
arbitrator has a current arrangement concerning prospective
employment or other compensated service as a dispute resolution
neutral with a party to the proceeding, or is participating in, or
has participated within the last 2 years in, discussions regarding
such prospective employment or service.  
   This bill would make a technical, nonsubstantive change to these
provisions.  
   This bill, in a consumer arbitration case, would also require the
disclosure of any solicitation made within the last 2 years by, or at
the direction of, a private arbitration company to a party or lawyer
for a party. The bill would prohibit the solicitation of a party or
lawyer for a party during the pendency of the arbitration. The bill
would also prohibit an arbitrator, from the time of appointment until
the conclusion of the arbitration, from entertaining or accepting
any offers of employment, offers of new professional relationships,
or offers of employment as a dispute resolution neutral in another
case from a party or lawyer for a party in the pending arbitration.
 
   Existing law requires a person serving as a neutral arbitrator
pursuant to an arbitration agreement to comply with the ethics
standards for arbitrators adopted by the Judicial Council, as
specified.  
   This bill would authorize a party to recover arbitration
proceeding costs from a private arbitration company if the
arbitration award is vacated because of a violation of the Judicial
Council ethical standards or a violation of the disclosure
requirements described above. The bill would also authorize a party
to petition the court to recover arbitration proceeding costs from a
private arbitration company if the arbitrator is dismissed during the
pendency of the arbitration because of a violation of the Judicial
Council ethical standards or a violation of the disclosure
requirements described above. 
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 1281.65 is added to the 
 Code of Civil Procedure   , to read:  
   1281.65.  From the time of appointment until the conclusion of the
arbitration, an arbitrator shall not entertain or accept either of
the following:
   (a) Any offers of employment or new professional relationships as
a lawyer, expert witness, or consultant from a party or lawyer for a
party in the pending arbitration.
   (b) Any offers of employment as a dispute resolution neutral in
another case involving a party or lawyer for a party in the pending
arbitration unless all parties to the pending arbitration, including
the lawyers in the arbitration, have conferred and agreed in writing,
before any solicitation of the arbitrator, to allow offers of future
employment as a dispute resolution neutral to be made to the
arbitrator. 
   SEC. 2.    Section 1281.85 of the   Code of
Civil Procedure   is amended to read: 
   1281.85.  (a) Beginning July 1, 2002, a person serving as a
neutral arbitrator pursuant to an arbitration agreement shall comply
with the ethics standards for arbitrators adopted by the Judicial
Council pursuant to this section. The Judicial Council shall adopt
ethical standards for all neutral arbitrators effective July 1, 2002.
These standards shall be consistent with the standards established
for arbitrators in the judicial arbitration program and may expand
but  may   shall  not limit the disclosure
and disqualification requirements established by this chapter. The
standards shall address the disclosure of interests, relationships,
or affiliations that may constitute conflicts of interest, including
prior service as an arbitrator or other dispute resolution neutral
entity, disqualifications, acceptance of gifts, and establishment of
future professional relationships.
   (b) Subdivision (a) does not apply to an arbitration conducted
pursuant to the terms of a public or private sector collective
bargaining agreement.
   (c) The ethics requirements and standards of this chapter are
nonnegotiable and shall not be waived. 
   (d) A party may recover costs incurred in an arbitration
proceeding from a private arbitration company if the arbitration
award is vacated because of a violation of the ethical standards
adopted by the Judicial Council pursuant to this section or a
violation of the disclosure requirements established by this chapter.
A party may also petition the court to recover costs incurred in an
arbitration proceeding from a private arbitration company if the
arbitrator is dismissed during the pendency of the arbitration
because of a violation of the ethical standards adopted by the
Judicial Council pursuant to this section or a violation of the
disclosure requirements established by this chapter. 
   SEC. 3.    Section 1281.9 of the   Code of
Civil Procedure   is amended to read: 
   1281.9.  (a) In any arbitration pursuant to an arbitration
agreement, when a person is to serve as a neutral arbitrator, the
proposed neutral arbitrator shall disclose all matters that could
cause a person aware of the facts to reasonably entertain a doubt
that the proposed neutral arbitrator would be able to be impartial,
including all of the following:
   (1) The existence of any ground specified in Section 170.1 for
disqualification of a judge. For purposes of paragraph (8) of
subdivision (a) of Section 170.1, the proposed neutral arbitrator
shall disclose whether or not he or she has a current arrangement
concerning prospective employment or other compensated service as a
dispute resolution neutral or is participating in, or, within the
last two years, has participated in, discussions regarding such
prospective employment or service with a party to the proceeding.
   (2) Any matters required to be disclosed by the ethics standards
for neutral arbitrators adopted by the Judicial Council pursuant to
this chapter.
   (3) The names of the parties to all prior or pending noncollective
bargaining cases in which the proposed neutral arbitrator served or
is serving as a party arbitrator for any party to the arbitration
proceeding or for a lawyer for a party and the results of each case
arbitrated to conclusion, including the date of the arbitration
award, identification of the prevailing party, the names of the
parties'  attorneys   attorneys,  and the
amount of monetary damages awarded, if any. In order to preserve
confidentiality, it shall be sufficient to give the name of any party
who is not a party to the pending arbitration as "claimant" or
"respondent" if the party is an individual and not a business or
corporate entity.
   (4) The names of the parties to all prior or pending noncollective
bargaining cases involving any party to the arbitration or lawyer
for a party for which the proposed neutral arbitrator served or is
serving as neutral arbitrator, and the results of each case
arbitrated to conclusion, including the date of the arbitration
award, identification of the prevailing party, the names of the
parties' attorneys and the amount of monetary damages awarded, if
any. In order to preserve confidentiality, it shall be sufficient to
give the name of any party not a party to the pending arbitration as
"claimant" or "respondent" if the party is an individual and not a
business or corporate entity.
   (5) Any attorney-client relationship the proposed neutral
arbitrator has or had with any party or lawyer for a party to the
arbitration proceeding.
   (6) Any professional or significant personal relationship the
proposed neutral arbitrator or his or her spouse or minor child
living in the household has or has had with any party to the
arbitration proceeding or lawyer for a party. 
   (7) For a consumer arbitration case, any solicitation made within
the last two years by, or at the direction of, the private
arbitration company to a party or lawyer for a party to the consumer
arbitration. During the pendency of the consumer arbitration, no
solicitation shall made of a party to the arbitration or of a lawyer
for a party to the arbitration. For purposes of this paragraph,
"solicitation" includes an oral or written request for arbitration
business, but does not include advertising directed to the general
public or communications indicating a general willingness to serve as
an arbitrator or private arbitration company. 
   (b) Subject only to the disclosure requirements of law, the
proposed neutral arbitrator shall disclose all matters required to be
disclosed pursuant to this section to all parties in writing within
10 calendar days of service of notice of the proposed nomination or
appointment.
   (c) For purposes of this section, "lawyer for a party" includes
any lawyer or law firm currently associated in the practice of law
with the lawyer hired to represent a party.
   (d) For purposes of this section, "prior cases" means
noncollective bargaining cases in which an arbitration award was
rendered within five years prior to the date of the proposed
nomination or appointment.
   (e) For purposes of this section, "any arbitration" does not
include an arbitration conducted pursuant to the terms of a public or
private sector collective bargaining agreement. 
  SECTION 1.    Section 1280 of the Code of Civil
Procedure is amended to read:
   1280.  As used in this title:
   (a) "Agreement" includes but is not limited to agreements
providing for valuations, appraisals and similar proceedings and
agreements between employers and employees or between their
respective representatives.
   (b) "Award" includes but is not limited to an award made pursuant
to an agreement not in writing.
   (c) "Controversy" means any question arising between parties to an
agreement whether such question is one of law or of fact or both.
   (d) "Neutral arbitrator" means an arbitrator who is either (1)
selected jointly by the parties or by the arbitrators selected by the
parties or (2) appointed by the court when the parties or the
arbitrators selected by the parties fail to select an arbitrator who
was to be selected jointly by them.
   (e) "Party to the arbitration" means a party to the arbitration
agreement:
   (1) Who seeks to arbitrate a controversy pursuant to the
agreement;
   (2) Against whom such arbitration is sought pursuant to the
agreement; or
   (3) Who is made a party to such arbitration by order of the
neutral arbitrator upon such party's application, upon the
application of any other party to the arbitration or upon the neutral
arbitrator's own determination.
   (f) "Written agreement" shall be deemed to include a written
agreement which has been extended or renewed by an oral or implied
agreement.