Friday, March 28, 2008

Duffens v. Valenti (Cal. Ct. App. - March 27, 2008)

You're killing me, Court of Appeal.

Earlier this week, I complain -- okay, I whine -- about the flood of opinions coming out of the Ninth Circuit and Court of Appeal this week. Including 30 in 32 hours. Crushing. At least for devoted court-watchers (and -readers) such as myself.

So what does yesterday bring? Twenty-plus opinions.

Good to know that people are listening. Not, I admit, that I expected anything else.

Fortunately, I have had time to read this opinion by Justice Huffman. An opinion that I'd mention, wholly apart from anything else, if only because it concerns Irene Valenti, who runs the "Valenti International" dating service. Which you've undoubtedly read about if you've ever been stuck on a transcontinental flight with a dead laptop battery and thus forced to read the free airline magazines (and advertisements therein) stuck helpfully in the seatback in front of you.

This is yet another in a series of cases against various "high profile" -- read: high cost -- dating services that promise contact with "high profile" -- read: rich -- men. Allegedly with no intent (or ability) to perform. The services also ain't cheap; the average plaintiff in this action paid almost $50,000. And didn't get married to, or presumably even nail, a multimillionaire. The latter of which would hardly be worth 50 Gs anyway. Trust me.

Anyway, the question here is whether the plaintiffs have to arbitrate -- in San Diego, no less (Valenti works out of Rancho Santa Fe, the tony neighborhood down here -- pursuant to the contract. Sure, the plaintiff is making the usual "recission" and "invalidity" claims about the contract in general, but, typically, you've got to arbitrate notwithstanding such arguments.

But the Court of Appeal holds otherwise here. There's no fraud going particularly to the arbitration clauses, Justice Huffman admits. But the underlying statutory regime governing dating services requires particular disclosures in the contract, and those weren't made here. Moreover, the statute prohibits misrepresentations in the contract as well. And since the statute says that a contract that violates the statute is void, the whole contract -- including the arbitration provision -- is void, Justice Huffman holds. At least on the particular record here.

There's a lot to be said for this opinion, which both manifestly understands and clearly articulates the underlying principles. But I wish there was more analysis in the last two or three pages of this 27-page opinion, which is basically the meat of the analysis. Justice Huffman admits that alleging that a contract is "void" (or voidable) doesn't automatically negate an arbitration requirement; after all, even in the common law, contracts can be voidable, but arbitration is still required. Justice Huffman understands that, but says that in the particular statutory context here, it seems like the Legislature meant to void the entire contract. But, again, that doesn't necessarily preclude mandatory arbitration; after all, an arbitrator could do that. Plus, lots of statutes say that a contract is void if certain requirements aren't met; does this mean that a statute that requires you to put the date on any signature line, for example, under penalty of having the contract be void also prevent mandatory arbitration? This seems both overly hypertechnical and not at all consistent with the overall doctrinal preference for arbitration. Justice Huffman concedes, in this regard, that only violations of "material" requirements would both void the contract as well as the arbitration clause, but doesn't really spell out either (1) what it means for materiality to extend to the arbitration clause rather than merely voiding the contract as a whole, or (2) why the particular provisions here were allegedly "material". For example, one of the statutory violations that made the contract void here was the failure to disclose that if the plaintiff moved more than 50 miles, they could get out of the contract. Well, sure, the (inexplicable!) failure to include such a provision might indeed make the contract void, but especially if none of the plaintiffs here in fact moved, why would it negate the arbitration provision? Presumably an arbitrator could -- and would -- find what the law requires and refund the money. Which is what the doctrinal preference for arbitration assumes.

It's not that I'm a monster fan of mandatory arbitration, especially in the context of statutes that reflect public policy and/or that protect consumers, or fully buy into existing doctrine. But I think it has a point, and given those contours, I think that Justice Huffman could have done a little more to articulate his doctrinal vision here -- particularly its limitations. I'm not saying that the result he reaches is wrong. Far from it. But I think there needs to be a bit more here. And I think that including it would substantially enhance, as well as clarify, the law here. Which is hardly limited to dating contracts, but instead will apply to a whole slew of contractual arbitration claims in the face of statutory allegations.

So that's my academic take. On the practical side, I only have one point: How could a high-classed pimp -- er, I mean, "matchmaker" -- not hire an attorney to make sure that her contracts comply with the one statute that exhaustively regulates her business and voids any contract that doesn't? It seems to me that doing so would be more than worth even a single $50,000 fee. (And I know I'm going to get grief for that pimp comment, but oh well. I wrote it, I was obviously being sarcastic, and this post is long enough, so I'll leave it in. Yes, I know, matchmaking is a profound and historical institution, many lives have been improved, blah blah blah. All of which is true, I'm sure. But I still get to insult people if I want. Because I love America, baby.)