Volume 1, Number 2
The Girardi Saga Continues
In our last newsletter, we reported on the Los Angeles Times articles involving the connection of three retired jurists, who also happened to be JAMS neutrals, with the Tom Girardi scandal and the fact that the newspaper somehow confused the jurists’ activities with the practice of mediation. That caused then Chief Justice Tani Cantile-Sakauye to express concern about regulation of mediators and Senator Tom Umberg to promise to introduce legislation to cure the purported problem.
Justice Cantile-Sakauye has since retired. However, she issued a statement at the time of her retirement wherein she once again expressed concern about mediator regulation and disclosure.
In addition, Senator Umberg has introduced two bills which on their faces do not appear to have any connection with mediation or any other form of ADR. However, CDRC believes that both likely are a response to the Times articles.
SB 40 is a spot bill. A spot bill is a placeholder which has relatively meaningless content but is designed to allow the author to amend it to include more meaningful legislation after the deadline for introducing legislation has expired. It is quite likely that if the bill is amended, it will have something to do with the Times articles.
The other bill is SB 42. This bill would require a licensee of the State Bar who knows that another licensee has engaged in professional misconduct that raises a substantial question as to that licensee’s honesty, trustworthiness, or fitness as an attorney in other respects, to inform the State Bar. Although the bill does not contain any sanctions for failure to report the misconduct, CDRC believes that a failure to do so could constitute conduct that is subject to State Bar discipline. The bill contains no safe harbor for a reporting attorney where the State Bar takes no action or the attorney who is the subject of the report is exonerated by the State Bar.
When considering SB 42, one major issue for ADR neutrals to consider is what would happen if an attorney mediator observes inappropriate actions by a party’s attorney during a mediation. Statements made by the party attorney that might be termed to be “professional misconduct” are confidential under the Evidence Code and so the attorney mediator is now barred from revealing such statements unless it would constitute criminal activity. However, SB 42 makes no exception for mediation confidentiality, even though it makes an exception for information otherwise protected by the attorney-client privilege or information gained by a licensee while participating in the Attorney Diversion and Assistance Program. This omission could give rise to an argument that SB 42 supersedes the confidentiality provisions of the Evidence Code.
CDRC Position. CDRC has remained in touch with Senator Umberg’s staff and is providing the staff with information concerning disclosure requirements imposed on ADR neutrals by both statute and ADR providers. The Board has not yet decided what action to take with respect to SB 42 but will review the bill at its next meeting.
The 2021 Breslin Case
In 2021, the Second District Court of Appeal held in Breslin v. Breslin (2021) 62 Cal.App.5 801, that Probate Code section 17206 authorizes trial courts considering petitions brought pursuant to Probate Code section 17200 to order parties to mediation. It further held the outcome of that mediation is binding on non-participating persons who receive notice of the pending mediation, barring them from objecting to the terms of the mediated settlement.
The Breslin decision did not set forth key elements of notice or attendance at the mediation. In the last newsletter, we reported that the Trust and Estates Section of the California Lawyers Association planned to introduce legislation to codify Breslin because courts were not uniformly addressing the elements of notice and attendance. It has now been reported to CDRC that the Trust and Estates Section has decided not to introduce such legislation.
CDRC Position. Breslin remains State law and the most significant aspect of it is that Probate Courts can order parties to mediate, a practice that is not available to other courts following Jeld-Wen, Inc. v. Superior Court, 146 Cal. App. 4th 536 (2007).
Amendment of the California International Commercial and Conciliation Act
In 1988, the California Legislature enacted the California International and Conciliation Act (CIAC), commencing at Code of Civ. Proc. Section 1297.11. The act was based on the Model Law on International Commercial Arbitration of the United Nations Commission on International Trade Law (UNCITRAL), a model law that sets forth widely accepted principles for arbitrating international commercial disputes. The decision to base the statute on the UNCITRAL model law was designed to make California a desirable place to conduct international arbitrations as part of the Legislature’s intent to enhance the business climate in California and, in particular, to induce businesses to locate a substantial portion of their operations in California.
In 2006, several substantive amendments were made to the UNCITRAL model law. Consequently, CIAC has not been in sync with the model law for nearly seventeen years. In order to rectify this situation, the International Law and ADR Committees of the Litigation Section of the California Lawyers Association established a subcommittee whose task was to prepare legislation that would once again largely follow the model law. That bill has now been filed. The bill currently does not have an author and so its status is “unbacked”. However, the subcommittee expects to find an author soon and so it should be under consideration by the Legislature in this session.
All the new or amended sections of the statute largely follow the model law as it currently exists. The proposed bill, among other things, 1) adds descriptions of various types of electronic communications to the definition of a written agreement; 2) provides that the Superior Court shall have the same power to issue an interim measure of protection in relation to arbitration proceedings, irrespective of whether the place of arbitration is California, as it has in relation to proceedings filed in the first instance in the Superior Courts; 3) requires that an arbitral tribunal find irreparable harm and likelihood of success on the merits as a condition to granting a request for an interim measure; 4) authorizes an arbitral tribunal to modify, suspend or terminate an interim measure or preliminary order on application by one of the parties or on its own initiative; 5) provides an arbitral tribunal the authority to require security from the party requesting an interim measure and requires the arbitral tribunal to order the party requesting a preliminary order to provide security unless the arbitral tribunal finds it is unnecessary or inappropriate to do so; 6) provides for the award of costs and damages against the party requesting interim measures or a preliminary order if the arbitral tribunal later determines that the interim measure or preliminary order should not have been granted; 7) requires the Superior Court to enforce an interim measure as a final and binding award of the arbitral tribunal and further provides the Superior Court with the authority to order security against the party requesting enforcement of the interim measure and 8) permits the Superior Court to refused to recognize and enforce an interim measure if (a) the Superior Court is satisfied that one of the grounds available for refusal to recognize and enforce an arbitral award under Article V(1) of the New York Convention is present, or (b) the Superior Court finds that the interim measure is incompatible with the powers of the Superior Court or one of the grounds under Article V(2) of the New York Convention is present.
CDRC Position. CDRC has not yet taken a position, pending finding of an author. However, CDRC in the past has been a supporter of a strong international arbitration statute in California. (Disclosure: A member of the CDRC board is also a member of the subcommittee.)
CDRC Annual Meeting
As a consequence of the COVID pandemic, CDRC has not had an annual meeting for several years. The time has come to resume this practice. However, because COVID concerns linger, the meeting will be by Zoom videoconference. It is currently scheduled for 12 noon to 2 pm on April 25. The tentative schedule is a presentation by Board President Richard Flier on the past, present, and future activities of CDRC; rendering of the Don Weckstein Award; a review of ADR 2022 decisions by board members Jim Madison and Paul Dubow; and a discussion of the ramifications of the Los Angeles Times articles, including an analysis of any possible legislation. Please look for a flyer on the program which CDRC hopes to issue next month.
Comments Welcome and Renewed CDRC Membership Appreciated
If you have not renewed your CDRC membership, we hope that you will do so very soon. You may renew by going to www.cdrc.net and hitting the membership icon. Further, if you have any comments on the developments described above or suggestions on other topics, please feel free to contact CDRC. You will find our contact information on the website. With respect to comments on legislation, you can also contact legislation co-chairs John Warnlof at firstname.lastname@example.org or Paul Dubow at