Kirk v. Ratner, No. B309880 (D2d7 Feb. 11, 2022)
This is a very dry procedural opinion in a high-profile Hollywood sex scandal litigation.
In 2017, an Actress, a Director, and four Execs entered a settlement agreement (in which each party was identified by pseudonym), regarding Actress’s claims of sexual harassment and defamation. The nature of the released claims are not stated in the opinion, but if you read the Hollywood Reporter, you likely can ventureaguess. The agreement contained a strong confidentiality provision and an arbitration clause.
Execs claim that the Actress may have been violating or threatening to violate the agreement. They initiated a JAMS arbitration against Actress, Director, Actress’s Attorney, and Actress’s fiance (who was not party to the agreement). Execs sought, under the JAMS rules, an ex parte TRO, which was granted, and then a preliminary injunction. An emergency arbitrator, appointed by JAMS under its emergency rules, issued an “interim award” that preliminarily enjoined the four defendants from disclosing any information deemed confidential under the agreement.
Actress and Attorney then filed a petition to vacate the interim ruling in LA Superior. But the California Arbitration Act does not give state courts the authority to either confirm or vacate rulings that are less than final. Per the code, an “award” that needs to “include a determination of all the questions submitted to the arbitrators the decision of which is necessary in order to determine the controversy.” Code Civ. Proc. § 1283.4. Only such an “award” can be confirmed vacated, or corrected by a superior court. See §§ 1285, 1286. So the upshot of this is that interim awards—like the preliminary injunction here—can neither be enforced nor vacated by a court until the whole shebang of the arbitration is done. So based on the Court of Appeal’s 2017 opinion in KaiserFoundation v. Superior Court, the trial court here dismissed petition for lack of jurisdiction.
On appeal, that gives rise to an additional question: whether the Court of Appeal has jurisdiction to review an appeal of the dismissal. The Court of Appeal’s jurisdiction is strictly statutory. Section 1294 defines that jurisdiction for arbitration-related matters. Under it an appeal can be taken from“(a) An order dismissing or denying a petition to compel arbitration. (b) An order dismissing a petition to confirm, correct or vacate an award; (c) An order vacating an award unless a rehearing in arbitration is ordered. (d) A judgment entered pursuant to this title. (e) A special order after judgment.”
Superficially, (b) seems to apply. The court, after all, did dismiss a petition to vacate. There is somewhat of a split of authority on the point. Compare Maplebear, Inc. v. Busick, 26 Cal. App. 5th 394 (2021) ((b) provides appellate jurisdiction) with Judge v. Nijjar Realty, Inc., 232 Cal. App. 4th 619 (2014) (it does not). The Court here agrees with Judge, which explained that (b) only applies to a petition that is actually addressed to“an award.” And since the interim ruling here is not an award, as § 1283.4 defines it, the dismissal of the petition is insufficiently final to be an appealable order.
Appeal dismissed.
FWIW, I predicted this very scenario in my write-up on Kaiser—that the finality requirement for “an award” would muddy up arbitrators’ ability to grant relief pendente lite under their own rules. Because of the lack of clarity, nobody is really getting what they want here. Execs have an arbitrator’s order granting injunctive relief that they can’t enforce with the contempt power. Actress and Attorney are subject to an order that restrains their speech for the life of the arbitration, for which there are good arguments regarding voidness, but which will never be subject to meaningful review. And that order potentially exposes them to some form of non-traditional enforcement by the arbitrator. (E.g., could the arbitrator put them in default as a sanction if they violate it?) Both sides would seem to have been better off had they availed themselves of the ability to seek provisional remedies with the court under § 1281.8.
There is one other thing that seems extraordinary hinky about the way this went down. Execs appear to have gotten a TRO, ex parte—real ex parte, not California ex parte—from the arbitrator. How can you do that? An pre-dispute agreement to arbitrate is not self-executing. Until a respondent voluntarily submits to the jurisdiction of the arbitrator or a court grants a motion to compel, an arbitrator has no personal jurisdiction over the respondent. So how, exactly could an arbitrator issue a TRO over the conduct of parties who never appeared before her? By showing up and fighting the PI, respondents here potentially missed a shot to get their case into court.