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California Senate Bill 1078 - What are your thoughts?

Last night Governor Brown vetoed California Senate Bill 1078, see the following link: 1078. The bill prohibits a California arbitrator from accepting an offer of employment in a future case involving a party or lawyer in a pending arbitration, without prior written consent. The bill also adds prohibitions and disclosure requirements relating to certain solicitations made by private arbitration companies.

What are your thoughts on this bill and should it have been vetoed? Please provide your thoughts/comments below.

Comments (8)

The veto was appropriate. California arbitrators are already the most closely regulated in the nation. Governor Brown was right not to add another layer of regulation.

Robert E. Barras:

First of all I am an architect, neutral member, and occasionally involved in construction disputes. My opinion is that I agree with the veto of Governor Brown. This is strictly an ethical matter and laws have a tendency to overshadow ethics and morals. If disclosure does not happen initially in a case, litigation or cause a judge to vacate an award. I am anxious to hear some of the comments otherwise.

I'm more troubled about the what has been going on behind the scenes than by what the bill contained. Brown, in his message accompanying the return of the Bill to the state senate, noted it addresses problems that don't even exist:

"Arbitrators in California are already subject to stringent disclosure requirements under existing state law and Judicial Council standards. I am reluctant to add additional disclosure rules and further prohibitions without evidence of a problem. Further, the existing Judicial Council procedure for amending arbitrator ethics standards is a deliberative and public process that can more appropriately consider additional requirements."

The anti-arbitration forces are hard at work, at least in California, doing anything and everything they can to undermine arbitration. In this case there was a concerted effort by arbitrators to fight back and they prevailed. Brown refused to accept hype as grounds for confirming the Bill. Let's hope other governors are as level headed as Brown was.

Paul Marrow

Anonymously:

Six months after the award the arbitrator should be free to accept employment unless there were communications during the arbitration in which event the arbitrator should be disqualified.

Anonymously

The law is problematic due to limited pools of qualified arbitrators within the various areas where there are consumer arbitrations. The corollary would be making the same requirement for judges in Landlord Tenant court as they will generally have ongoing cases with a couple of landlords. Since they would never limit a judge in a consumer court in such a manner -- they should not limit an arbitrator in a similar circumstances.

Edwin H. Stern:

I see no downside to the legislation embodying a principle everyone should follow with or without controlling legislation. In New Jersey, by case law, judges were prohibited from discussing future employment involving attorneys before them, and a judgment was vacated and the matter had to be retried because the judge had discussed employment with an attorney in a case before him between the time he decided the matter and the date on which he entered judgment. The principle was subsequently embodied into the Code of Judicial Conduct. Whether it affected many judges or not was not the point. It provided codification for easy reference to an established principles of ethics. I see no reason why the same should not apply to arbitrators if for no other reason than to advise parties and their counsel that such conduct is prohibited whether or not it results in undue influence. But not having read the entire veto message (beyond what is quoted above) there may be something I am missing.

Ed Stern

Paul Dubow:

The veto message is significant because the Governor 1) stated that arbitrators in California are already subject to the most stringent disclosure requirements in the United States and 2) suggested that any tweaking of these requirements be done by the Judicial Council, not the Legislature. However, I doubt if the Legislature will get the message and it will continue to try to kill consumer arbitration in California.

Raoul Drapeau:

I agree with Gov. Brown's sentiment that this seems to be a solution in search of a problem. If these kinds of actions are necessary, then the codes of ethics that we all have to subscribe to must be meaningless. Surely there are remedies already in place for those who take a job soon after rendering a decision in a case, leaving a taste of quid-pro-quo.

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