Tuesday, November 13, 2012

Richey v. AutoNation (Cal. Ct. App. - Nov. 13, 2012)

The parties agree to arbitrate.  The arbitrator perceives the relevant law to be that expressed by the Seventh Circuit, and follows this law to reject plaintiff's claim and enter a judgment for defendant.  The trial court confirms the award, holding that even if the arbitrator was wrong on the law, that's not reviewable.  Arbitrators can get things wrong.  That doesn't justify a motion to vacate.  Otherwise the value of arbitration would be negligible.

The Court of Appeal reverses.

I'm sympathetic to the view that the arbitrator got it wrong.  But I think the Court of Appeal's decision goes right up to -- and perhaps crosses -- the legitimate line of deference that we have to give to arbitrators.  We admittedly don't want arbitrators to deliberately disregard the law, at least when (as here) statutory rights are at issue.  That's indeed the federal standard for the proper level of legal review.

But that's clearly not what transpired here.  The arbitrator took a certain view of the law.  A view supported by some very bright jurists, and one that's unambiguously the law applied to millions of people.  Maybe that view is right, maybe it's not.  But it's clearly not "manifestly disregarding" that statute.  To permit the Court of Appeal to review that decision comes exceedingly close to allowing appellate review of alleged legal errors in arbitration decisions.

I'm also not entirely sympathetic to the plaintiff here.  He took leave claiming that he was too sick to work and then worked at his own restaurant.  Not exactly what we're trying to protect by a statute that authorizes medical leave when you really need it.