Compel Arbitration

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					Resolution 13-12-2009 Discovery Stay During Pendency Of Petition To Compel Arbitration RESOLVED, that the Conference of the Delegates of California Bar Associations recommends that legislation be sponsored to add Code of Civil Procedure section 1281.25 to read as follows:
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§ 1281.25. (a) A petition to compel arbitration pursuant to section 1281.2 may be filed within 60 days of service of the complaint or, in the court’s discretion, at any later time upon terms it deems proper. The petition shall be scheduled by the clerk of the court for a hearing not more than 30 days after service of the petition unless the docket conditions of the court require a later hearing. (b) All discovery proceedings in the action shall be stayed upon the filing of a petition to compel arbitration pursuant to section 1281.2, except for discovery by any party limited solely to issues relevant to the petition to compel arbitration. The stay of discovery shall remain in effect until notice of entry of the order ruling on the petition. The court may allow additional specified discovery upon a showing of good cause, notwithstanding any other provisions of this subdivision (c) In any petition to compel arbitration subject to section 1281.2, a prevailing party petitioning the court to compel arbitration shall be entitled to recover his or her reasonable attorney’s fees and costs, if the court finds that the responding party’s opposition to enforcement of the arbitration was frivolous or solely intended to cause unnecessary expense or delay for the petitioning party. If the court finds that the petition to compel arbitration is frivolous or is solely intended to cause unnecessary delay, the court shall award costs and reasonable attorney’s fees to a responding party who prevails in the ruling on the petition. (Proposed new language underlined; language to be deleted stricken.)

PROPONENT: San Diego County Bar Association STATEMENT OF REASONS: Existing Law: Currently, where a defendant moves to compel arbitration pursuant to a contractual provision mandating binding arbitration, the law allows the parties to conduct discovery in the litigation while the petition to compel remains pending. This Resolution: This Resolution would fill a gap in the current law relating to private arbitrations. It imposes a stay on discovery, subject to exception upon showing of good cause, while a petition to compel arbitration is pending, and requires such a petition to be heard by the court within 30 days of the petition’s filing, unless the court’s docket prevents a hearing within that time. This Resolution also permits the prevailing party’s recovery of reasonable attorney’s fees and costs where the court determines that the petition or opposition to the petition was frivolous or intended solely to cause unnecessary delay. 13-12-1

The Problem: Under current law, plaintiffs often conduct significant discovery while a petition to compel contractual arbitration is pending, which at times is for months due to the congested calendars of the judges. This creates potential trouble to the petitioner-defendant because, on the one hand, the defendant is subject to motions to compel discovery responses, while on the other hand, the defendant risks a finding that he or she has waived the contractual right to arbitration by filing motions for protective orders or otherwise seeking affirmative relief from the court before the petition to compel is heard. The current law also causes potential difficulties for plaintiffs. If the petition to compel arbitration is granted, the Superior Court loses jurisdiction to rule on any motions to compel the plaintiff may have filed before the Court’s ruling on the petition to compel, requiring plaintiff to re-issue the discovery requests during the arbitration process. Additionally, the provisions requiring award of attorney’s fees and costs for a frivolous petition or opposition are needed. Often, petitions to compel are filed after much “meeting and conferring,” and where no good reason exists for the plaintiff to resist arbitration, but the defendant is forced unnecessarily to spend the money needed to prepare and file a motion to compel. The proposed provisions in this regard mirror those the Legislature has already enacted in Code of Civil Procedure section 425.15 regarding SLAPP suits. IMPACT STATEMENT: This resolution does not affect any other law, statute or rule. AUTHOR AND/OR PERMANENT CONTACT: Dan H. Deuprey, Esq., Deuprey & Associates, LLP, 401 B Street, Suite 1160, San Diego, CA 92101; Telephone: (619) 757-1900; e-mail: RESPONSIBLE FLOOR DELEGATE: Dan H. Deuprey