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What ACBL Arbitration Agreement?

(If you aren’t a member of the ACBL, you may want to skip to the next article.)  Last January, I published an article about ongoing litigation involving the ACBL and an ACBL member entitled “The ACBL’s (Secret?) Arbitration Agreement.”   The article included a poll asking whether ACBL members were aware they had agreed to arbitration. As of today, fully half the respondents have noted they were unaware.

The article explained that the ACBL was appealing from a ruling denying its motion to compel its member to submit to arbitration. The trial court concluded that the ACBL had failed to carry its burden of proving the existence of an arbitration agreement. The California state appellate court proceeded expeditiously and on September 20, 2017, handed down its decision affirming the trial court ruling.

I don’t intend to quote the entire 14-page opinion, which can be found here.  One passage described the defendant ACBL’s efforts to keep its members out of court. “ACBL adopted an arbitration policy at a board meeting in Long Beach, California, in 2003. The 2003 Long Beach minutes indicate the ACBL board directed management employees to publicize the arbitration policy to members ‘as soon as possible.’ Despite that directive, no evidence was presented that the policy was publicized in any way until 2008. At that time, it was included on the reverse side of the renewal notice/dues coupon and appears substantially the same today. Since 2008, it has been ‘hidden . . . on . . . [its] website.’”

The ACBL argued that a member’s renewal of membership binds the member to all new membership terms. The court acknowledged that this would be “a correct statement, if the member knew acceptance of mandatory arbitration and waiver of jury trial rights was one those obligations. However, before a party’s acceptance of contract to arbitrate will be implied in fact, that party must have notice of the arbitration clause.” Like the trial court, the appellate court concluded that a notice on the reverse side of a renewal invoice was insufficient. “We agree a dues invoice the member receives once a year is not the sort of writing in which one would ordinarily expect to find a contract to arbitrate disputes and give up trial rights. Nothing on the front of the invoice alerts the member to this important information on the back side of the invoice. In fact, it invites the member to read the back side only for ‘change of address on back’ at the bottom of the page below the notices.”

The court’s decision recognized there are about 165,000 ACBL members. The legal significance of the decision for those of us who are members is debatable. The court elected to file the opinion unpublished. According to California Rules of Court, an unpublished opinion “must not be cited or relied on by a court or a party in any other action.” An unpublished opinion is generally decisive only for the parties involved. However, the Rules recognize some exceptions, one being the doctrine of collateral estoppel. A brief summary of that complicated doctrine is that it “precludes relitigation of an issue previously adjudicated if: (1) the issue necessarily decided in the previous suit is identical to the issue sought to be relitigated; (2) there was a final judgment on the merits of the previous suit; and (3) the party against whom the plea is asserted was a party, or in privity with a party, to the previous suit.” (Producers Dairy Delivery Co. v. Sentry Ins. Co. (1986) 41 Cal.3d 903, 910.) Under this doctrine the unpublished opinion would appear to be relevant and binding on the ACBL whenever it seeks to compel arbitration of another member’s lawsuit and it relies on essentially the same evidence as described in the opinion.

(Alert! I’m interested in this aspect of this litigation as an ACBL member who is a retired lawyer. I’m not the plaintiff’s lawyer, though he is a friend of mine. I’m also friendly with at least one of the defendants.)

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