Litigation

Arbitration: Maybe The Common Wisdom Isn't Always So Wise

By Bruce Nye

       Here are some elements of the "common wisdom" about arbitration:

• Arbitration is good for defendants, bad for plaintiffs;
• This is particularly so in employment cases, where arbitration removes a case's "high-end" (i.e., "runaway") risk;
• It's better for defendants to have retired judges as arbitrators, particularly judges retired from conservative venues;
• Defendants in disputes with arbitration agreements should move to stay the civil case and compel arbitration.

    Now, here's the thing about the common wisdom:  sometimes it isn't so much.  Take, for example, the case of Paul Thomas Chester v. Freedom Communications Incorporated, et al., Los Angeles Superior Court Action No. BC353567.  Case looks to be a fairly high-powered employment dispute.  According to the Los Angeles Superior Court web site, one or more of the defendants moved to stay the case and compel arbitration.  Off to arbitration it went, before Judge William McDonald (Ret.) from Orange County Superior Court.  Judge McDonald, a former business lawyer, sat in one of the most conservative counties in the State of California. 

    Then the wheels started to fall off.  The one individual defendant began representing himself and the remaining corporate defendants.  The matter proceeded to arbitration by default.  And Judge McDonald awarded $3.9 billion -- yes, that's $3.9 billion dollars in damages, attorneys' fees, costs, penalties and interest, including $2,926,276,674.27 in punitive damages. 

    And the trial court judge in Los Angeles Superior Court confirmed the award and entered judgment on May 28, 2009.

Hat tip to California Punitive Damages an Exemplary Blog
and Settle It Now.

Full post as published by CalBizLit on June 10, 2009 (boomark / email).