Thursday, February 09, 2012

McCaw vs. Roberts Awakens Blogger From His Sleep

Well, I know it's been some time since you last heard from me and perhaps even a few of you out there had given me up for dead, but I'm back blogging today in order to write about something that probably won't get much coverage anywhere else, oral argument in the Wendy McCaw v. Jerry Roberts case. (Officially known as Ampersand Publishing v. Roberts)

You might recall that this is the case where Roberts, the former editor of the Santa Barbara News-Press, was sued by McCaw via her Ampersand Publishing for breach of contract and sought damages of $25 million. The case was arbitrated and McCaw failed to establish any of her claims against Roberts. Roberts was awarded nearly $1 million from the arbitrator. McCaw appealed the decision and the case was heard yesterday by a three-judge panel of the State Court of Appeal which sits in Ventura. Since I was in Ventura anyway to teach a class later that evening, I decided to drop by and watch the oral argument in the afternoon.

The primary issue before the court was whether the arbitrator had lost the power to decide the case by not issuing a ruling within 33 days of the close of the arbitration hearing. McCaw's position was that she had, thus rendering her ruling in favor of Roberts null and void.

Robert's employment contract with McCaw's Ampersand Publications, owner of the News-Press, provided that any disputes would be submitted to arbitration under the rules of the American Arbitration Association. As Presiding Justice Arthur Gilbert of the appellate court pointed out at the argument, AAA Rule 6A provides that, "the arbitrator shall have power to decide his or her own jurisdiction." And on top of that, as Gilbert pointed out, "Aren't there all sorts of cases saying the arbitrator can be wrong about all sorts of things?"

Michael Garrison of the L.A. law firm of O'Melveny and Meyers, who represents Ampersand and McCaw, acknowledged that was true but didn't elaborate. Since he wouldn't elaborate, I will. Arbitrators can issue rulings that can be dead wrong on the substance and procedure of the law, but unless the arbitrator engaged in fraud or corruption, they can't be overturned. So, at least in that regard, McCaw has an uphill battle.

Garrison, nevertheless insisted that the arbitrator gave up her authority to decide the case because she never asked the parties if the arbitration could be extended. That statement prompted Justice Kenneth Yegan to ask, with what sounded to me like a tone of disbelief, "So she loses her power because she doesn't ask you for permission?"

Between the two attorneys who argued the case, Garrison on behalf of Ampersand and Santa Barbara's Herb Fox for Roberts (who was watching from the audience) Garrison clearly spent more time on the hot seat during the course of the oral argument. At one point Justice Gilbert, in a classic example of a cross-examiner wording a question so as to force the person answering to take an extreme position, asked Garrett, "So, if we wrote an opinion supporting your position, we would be saying Rule 6A doesn't apply?" Garrison had little choice but to agree. Whatever the outcome of the case, I think it's a good bet that the court's opinion won't say that Rule 6A doesn't apply.

Towards the end of the argument Garrison tried to emphasize the long delay between the close of the arbitration and the issuance of the final award. In response to that point Justice Gilbert was quick to ask, "Wasn't that because Ampersand didn't pay its arbitration fees?

"That's a fair point," conceded Garrison. Then again, what else could he say?

I would expect the court to issue its decision in this case in about a month.

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Now, just because I've returned from a long hiatus to tell you about the Roberts case, doesn't mean I'm back to blogging on a regular and frequent basis. Casual and sporadic is more my style these days. But, whenever something is worth pointing out or I feel I have something to say, this will continue to be where I say it. Stay tuned.
© 2012 by Craig Smith and