Adr Update

• Publication year: 2023
• Author: Ramit Mizrahi

ADR UPDATE

AUTHOR^*

Ramit Mizrahi

Dear Reader, welcome to my first column covering mediation, arbitration, and all things ADR! In reflecting on the role of this column, which we have revived after a one-year hiatus, I aim to keep you up to date on the latest cases, and maybe share some reflections, space permitting. The deluge of arbitration cases never stops (by my count, there were about 60 published decisions in the past year). Space and time constraints mean that I will likely give you mostly big-picture overviews of the most important cases—enough to pique your interest so you can decide which ones are worth reading and digging into further. As important arbitration decisions often come down in wage-and-hour cases, I will aim not to cover anything that my fellow columnists and contributors have already written about. (On that note, I highly recommend you take a look at our November 2022 features discussing Viking River Cruises, Inc. v. Moriana, 142 S. Ct. 1906 (2022), and its impact on PAGA cases, as well as this month's column by Lauren Teukolsky covering some post-Viking decisions.) This issue's column will focus on some recent cases worth noting, going back several months.

AGGRESSIVE SETTLEMENT COMMUNICATIONS & ANTI-SLAPP PROTECTIONS

Flickinger v. Finwall, 85 Cal. App. 5th 822 (2022)

Flickinger is a colorful case addressing where the line is drawn with respect to anti-SLAPP (CAL. CODE CIV. PROC. § 425.16) protections for aggressive pre-litigation communications. In Flickinger, the working relationship between a homeowner and a contractor broke down with remodeling work still incomplete. Each threatened the other. The homeowner threatened to sue the contractor for not completing the work and not getting required permits, and sent a demand letter seeking $125,000. The contractor's defense was that the homeowner had not wanted the permits. He claimed that the homeowner had shared, while drunk, that this was because he was paying for the work with illegal kickbacks received from vendors while working for Apple. The contractor, through counsel, rejected the demand in a response containing the following language: "If [plaintiff] initiates litigation, [the contractor's] position will not change and he will aggressively defend himself. I suggest you discuss with [plaintiff] how such litigation may result in Apple opening an investigation into [plaintiff's] relationships with vendors." The homeowner filed suit, prevailed, and was awarded damages. He then filed a second suit against the contractor and his counsel, including for civil extortion and a Ralph Civil Rights Act (CAL. CIV. COD § 51.7) violation. The defense filed an anti-SLAPP motion, which the trial court denied. It determined that the response to the demand letter amounted to extortion as a matter of law, depriving it of anti-SLAPP protections. The Court of Appeal reversed. It applied Flatley v. Mauro, 39 Cal. 4th 299 (2006), and concluded that the letter fell within the bounds of professional conduct such that it was protected by the anti-SLAPP statute. The Court of Appeal reasoned that the letter made no "threat" other than that the contractor would "aggressively defend himself," and that the litigation itself could result in negative repercussions. This is not a threat to report the plaintiff to prosecuting authorities or take other actions deemed extortionate.

ARBITRATION WAIVER

Davis v. Shiekh Shoes, LLC, 84 Cal. App. 5th 956 (2022)

The Court of Appeal affirmed the trial court's denial of the employer-defendant's motion to compel arbitration based on waiver where the defendant had waited for 17 months before filing its motion. The Court determined that there was no reasonable explanation for the delay, rejecting arguments that the employer lacked counsel for several months, experienced...