CALIFORNIA CLASS ACTION LAW

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In an unpublished decision, the First District Court of Appeal affirmed the trial court’s denial of a motion to compel arbitration in a wage and hour class action, where defendants conducted voluminous discovery and filed and fully litigating two motions to compel further responses to discovery, a motion for sanctions and a motion for a protective order.    Partridge, et al. v. Hott Wings, Inc., et al., No. A130266, 2012 WL 470458 (Feb. 14, 2012).

Discussion

The Court found that Defendants’ delay in filing their petition to compel arbitration “connotes an intent not to arbitrate”.  Id. Defendants conducted substantial discovery:

Between March 2010 and the October 2010 hearing on defendants’ motion to compel arbitration, defendants engaged in voluminous written discovery to which plaintiffs responded.   In addition, defendants deposed numerous plaintiffs and third party witnesses.   Although plaintiffs had begun deposing witnesses, they had not yet obtained basic documents from defendants through discovery.   The discovery focused on the liability of individual defendants and the franchise defendants that employ plaintiffs.   As a result of defendants’ discovery requests, plaintiffs provided information regarding plaintiffs’ estimated damages, which defendants were responsible for which violations, and the liability of the individual as well as the franchise defendants.   A reasonable inference is that the information gained from defendants’ discovery goes to significant issues in plaintiffs’ case.

Id.

In addition, the Court found that Defendants “substantially invoked the litigation machinery” by:

filing and fully litigating two motions to compel further responses to discovery, a motion for sanctions and a motion for a protective order.   They also initiated numerous meet and confer proceedings and threatened to file additional motions to compel, for sanctions or to enforce discovery orders.   The court’s order noted it had presided over some of the discovery disputes, while others were before the appointed discovery referee.

Id.

Supporting the order, was trial court’s express finding that defendants “used the discovery processes of the court to gain information about Plaintiff’s claims that could not have been gained in arbitration.” Id.

The Court of Appeal concluded that the “circumstances here, considered as a whole, establish that defendants unreasonably delayed in moving to compel arbitration and conducted voluminous discovery to gain information regarding plaintiffs’ case not available in arbitration, and that plaintiffs were prejudiced.” Id.  Finding that substantial evidence supported the trial court’s finding that defendants waived the right to compel arbitration, the Court of Appeal affirmed the decision.  Id.

Justices and Attorneys

Associate Justice Mark B. Simons wrote the opinion for the court.  Presiding Justice Barbara J.R. Jones and Associate Justice Terence L. Bruiniers concurred.

Burton Fredrick Boltuch, Law Offices of Burton Boltuch, 1300 Clay Street, Suite 600, Oakland, CA 94612-1427, Rachel Elizabeth Brill, Goldstein, Demchak, Baller, et al, 300 Lakeside Drive-Suite 1000, Oakland, CA 94612, for Plaintiffs and Respondents.

Timothy Charles Cronin, Law Ofcs of Timothy C. Cronin, 744 Montgomery Street, Second Floor, San Francisco, CA 94111, for Defendants and Appellants.

By CHARLES JUNG