BILL NUMBER: SB 1078 ENROLLED
BILL TEXT
PASSED THE SENATE AUGUST 30, 2016
PASSED THE ASSEMBLY AUGUST 29, 2016
AMENDED IN ASSEMBLY AUGUST 19, 2016
AMENDED IN ASSEMBLY JUNE 14, 2016
AMENDED IN SENATE MAY 10, 2016
AMENDED IN SENATE APRIL 14, 2016
AMENDED IN SENATE APRIL 4, 2016
INTRODUCED BY Senator Jackson
FEBRUARY 17, 2016
An act to amend Section 1281.9 of, and to add Section 1281.65 to,
the Code of Civil Procedure, relating to arbitration.
LEGISLATIVE COUNSEL'S DIGEST
SB 1078, Jackson. Civil procedure: arbitration.
Existing law governs arbitration in civil proceedings. Under
existing law, a neutral arbitrator is defined as one who is selected
jointly by the parties or by the parties' arbitrators, or is
appointed by the court if the parties or their arbitrators cannot
jointly select an arbitrator. Existing law requires a person selected
to serve as a neutral arbitrator to disclose all matters that could
cause a person aware of the facts to reasonably entertain a doubt as
to the proposed neutral arbitrator's impartiality. Existing law
requires the disclosure to include, among other things, whether or
not the proposed neutral arbitrator has a current arrangement
concerning prospective employment or other compensated service as a
dispute resolution neutral with a party to the proceeding, or is
participating in, or has participated within the last 2 years in,
discussions regarding such prospective employment or service.
This bill, in a consumer arbitration case, would also require the
disclosure of any solicitation made within the last 2 years by, or at
the direction of, a private arbitration company to a party or lawyer
for a party. The bill would only require disclosure of solicitations
made after January 1, 2017. The bill would specify what is, and what
is not, a solicitation for purposes of this disclosure. The bill
would prohibit the solicitation of a party or lawyer for a party
during the pendency of the arbitration. The bill would also prohibit
an arbitrator, from the time of appointment until the conclusion of
the arbitration, from entertaining or accepting any offers of
employment or offers of new professional relationships, and, in a
consumer arbitration case, would prohibit the arbitrator from
entertaining or accepting any offers of employment as a dispute
resolution neutral in another case from a party or lawyer for a party
in the pending arbitration, except as provided.
This bill would exempt specified self-regulatory organizations
from the application of the bill. The bill would provide that its
provisions are severable.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1281.65 is added to the Code of Civil
Procedure, to read:
1281.65. (a) From the time of appointment until the conclusion of
the arbitration, an arbitrator shall not entertain or accept either
of the following:
(1) Any offers of employment or new professional relationships as
a lawyer, expert witness, or consultant from a party or lawyer for a
party in the pending arbitration.
(2) In a consumer arbitration case, any offers of employment as a
dispute resolution neutral in another case involving a party or
lawyer for a party in the pending arbitration unless all parties to
the pending arbitration, including the lawyers in the arbitration,
have conferred and agreed in writing, before any solicitation of the
arbitrator, to allow offers of future employment as a dispute
resolution neutral to be made to the arbitrator.
(b) This section does not apply to an arbitration conducted or
administered by a self-regulatory organization, as defined by the
federal Securities Exchange Act of 1934 (15 U.S.C. Sec. 78a) or
regulations adopted under that act. This section also does not apply
to an arbitration conducted pursuant to the terms of a public or
private sector collective bargaining agreement.
(c) For purposes of this section, "lawyer for a party" has the
same definition as that term is defined in Section 1281.9.
SEC. 2. Section 1281.9 of the Code of Civil Procedure is amended
to read:
1281.9. (a) In any arbitration pursuant to an arbitration
agreement, when a person is to serve as a neutral arbitrator, the
proposed neutral arbitrator shall disclose all matters that could
cause a person aware of the facts to reasonably entertain a doubt
that the proposed neutral arbitrator would be able to be impartial,
including all of the following:
(1) The existence of any ground specified in Section 170.1 for
disqualification of a judge. For purposes of paragraph (8) of
subdivision (a) of Section 170.1, the proposed neutral arbitrator
shall disclose whether or not he or she has a current arrangement
concerning prospective employment or other compensated service as a
dispute resolution neutral or is participating in, or, within the
last two years, has participated in, discussions regarding such
prospective employment or service with a party to the proceeding.
(2) Any matters required to be disclosed by the ethics standards
for neutral arbitrators adopted by the Judicial Council pursuant to
this chapter.
(3) The names of the parties to all prior or pending noncollective
bargaining cases in which the proposed neutral arbitrator served or
is serving as a party arbitrator for a party to the arbitration
proceeding or for a lawyer for a party and the results of each case
arbitrated to conclusion, including the date of the arbitration
award, identification of the prevailing party, the names of the
parties' attorneys, and the amount of monetary damages awarded, if
any. In order to preserve confidentiality, it shall be sufficient to
give the name of any party who is not a party to the pending
arbitration as "claimant" or "respondent" if the party is an
individual and not a business or corporate entity.
(4) The names of the parties to all prior or pending noncollective
bargaining cases involving a party to the arbitration or lawyer for
a party for which the proposed neutral arbitrator served or is
serving as neutral arbitrator, and the results of each case
arbitrated to conclusion, including the date of the arbitration
award, identification of the prevailing party, the names of the
parties' attorneys and the amount of monetary damages awarded, if
any. In order to preserve confidentiality, it shall be sufficient to
give the name of any party not a party to the pending arbitration as
"claimant" or "respondent" if the party is an individual and not a
business or corporate entity.
(5) Any attorney-client relationship the proposed neutral
arbitrator has or had with a party or lawyer for a party to the
arbitration proceeding.
(6) Any professional or significant personal relationship the
proposed neutral arbitrator or his or her spouse or minor child
living in the household has or has had with a party to the
arbitration proceeding or lawyer for a party.
(7) (A) For a consumer arbitration case, any solicitation made
within the last two years by, or at the direction of, the private
arbitration company to a party or lawyer for a party to the consumer
arbitration. During the pendency of the consumer arbitration, no
solicitation shall be made of a party to the arbitration or of a
lawyer for a party to the arbitration. Any solicitation made before
January 1, 2017, is not required to be disclosed pursuant to this
paragraph.
(B) This paragraph does not apply to an arbitration conducted or
administered by a self-regulatory organization, as defined by the
federal Securities Exchange Act of 1934 (15 U.S.C. Sec. 78a) or
regulations adopted under that act.
(C) (i) For purposes of this paragraph, "solicitation" includes
either of the following:
(I) Private presentations made to a party or lawyer for a party by
the private arbitration company or the arbitrator.
(II) Oral or written discussions, meetings, or negotiations to
designate the private arbitration company or the arbitrator as the
arbitration provider or arbitrator for a party in specific contracts.
(ii) For purposes of this paragraph, "solicitation" does not
include any of the following:
(I) Advertising directed to the general public.
(II) Communications indicating a general willingness to serve as
an arbitrator or private arbitration company. For purposes of this
subclause, "communications" include, but are not limited to, standard
educational materials about alternative dispute resolution or the
provider organization.
(III) Presentations made by the private arbitration company or the
arbitrator at a program or seminar held open to the public.
(IV) Responding to inquiries regarding the arbitration provider's
costs, rules, procedures, or standards.
(b) Subject only to the disclosure requirements of law, the
proposed neutral arbitrator shall disclose all matters required to be
disclosed pursuant to this section to all parties in writing within
10 calendar days of service of notice of the proposed nomination or
appointment.
(c) For purposes of this section, "lawyer for a party" includes
any lawyer or law firm currently associated in the practice of law
with the lawyer hired to represent a party.
(d) For purposes of this section, "prior cases" means
noncollective bargaining cases in which an arbitration award was
rendered within five years before the date of the proposed nomination
or appointment.
(e) For purposes of this section, "any arbitration" does not
include an arbitration conducted pursuant to the terms of a public or
private sector collective bargaining agreement.
SEC. 3. The provisions of this bill are severable. If any
provision of this bill or its application is held invalid, that
invalidity shall not affect other provisions or applications that can
be given effect without the invalid provision or application.