Metropolitan News-Enterprise


Tuesday, March 12, 2002


Page 1


Arbitration Bill Introduced to Restrict Jurists’ Entry Into Private Judging When Leaving Bench


By ROBERT GREENE, Staff Writer


California judges would have to wait a year before becoming private arbitrators and arbitration firms would lose their immunity from suit under a package of bills unveiled yesterday by members of the Assembly Judiciary Committee.

The bi-partisan group said the six bills were necessary to stem abuses in the private judging industry that threaten to undermine the public justice system.

On her first day as chair of the Judiciary Committee, Democrat Ellen Corbett of San Leandro said she expected the bills to win broad support.

“I’m really hopeful that this package will be successful,” Corbett told the MetNews. “We have support from both sides of the aisle. I can’t think of anyone who would be against making these arbitration proceedings more fair and standing up to scrutiny.”

Corbett said she and her committee colleagues decided to introduce the reform proposals after two hearings that highlighted private arbitration issues. A third, scheduled for today in Sacramento, is to focus on the health care industry.

The hearings have underscored the growing presence of mandatory arbitration agreements in consumer contracts for everything from furniture sales to medical treatment. Under such contracts, the purchaser must waive the right to sue in court in favor of binding arbitration. Many contracts name the arbitration company, an arrangement that Corbett said leave the impression that the arbitrator is working for the seller.

None of the bills has yet been assigned a number.

Assemblywoman Hannah-Beth Jackson, D-Santa Barbara, is authoring one of the proposals, which would impose a mandatory “resting period” between the time a trial or appellate judge retires and the time he or she begins work at a private judging firm.

The details have yet to be determined, but a spokesman for the committee said the most likely period would be one year. The measure is meant to track similar restrictions on former legislators becoming Sacramento lobbyists.

Jackson’s bill would also prohibit arbitration companies from recruiting judges until they are off the bench.

California Judges Association Executive Director Constance Dove said that if passed, the bill’s impact would be limited to “the few people” who leave the bench before their pensions have vested.

“It will have a profound effect on the few people who take early retirement, but not very many judges do,” she said.

But all judges, including those who retire in the normal course and qualify for their pensions, would have to comply with the waiting period before taking the substantially hiring salaries often offered by arbitration firms.

A representatives of JAMS, one of the largest private arbitration firms, declined comment yesterday.

One of Corbett’s proposals, perhaps the most controversial part of the package, would make clear that private arbitration companies lack absolute immunity for wrongdoing in mandatory consumer arbitrations.

“In testimony we learned that these private corporations have just assumed the mantle of absolute immunity,” Corbett explained. “That really made us sit up in our seats.”

A second Corbett bill would require that data on private arbitrations, including their outcomes, be collected and published.

Republican Tom Harman of Huntington Beach is authoring a bill that would bar private judging firms from investing in companies that are parties to mandatory consumer arbitration cases that they hear.

Former committee chair Darrell Steinberg, D-Sacramento, is authoring a bill to bar companies from picking an exclusive arbitration firm as part of its mandatory clause. The measure also would bar arbitration companies from engaging in other types of business.

 Assemblyman Howard Wayne, D-San Diego, is proposing to ban requirements that the loser of an arbitration pays all costs.


Copyright 2002, Metropolitan News Company