Thursday, February 4, 2010
Arbitration Ordered on Ex-Counsel’s Claims Against Amgen
By a MetNews Staff Writer
This district’s Court of Appeal has ruled that the former corporate counsel for Amgen Inc. must arbitrate his wrongful termination claim in accordance with the terms of his employment contract.
In a Jan. 21 decision ordered published yesterday, Div. Six concluded that discovery limits imposed by the arbitration provisions of Darrell G. Dotson’s agreement with the Thousand Oaks-based biotechnology corporation were not unconscionable.
Dotson said that Amgen had recruited him from Howrey LLP’s Houston office in 2004, offering him an annual salary of $170,000, a $35,000 signing bonus, stock options, eligibility in a management incentive plan and other benefits, contingent upon his signing a separate, three-page arbitration agreement.
The agreement provided that all disputes between Dotson and Amgen, including claims for wrongful termination and violations of state law, would be resolved by binding arbitration. The agreement contained a paragraph in capital letters stating that Dotson should consult his attorney about the agreement, enter the agreement voluntarily and, by signing, waived his right to a court or jury trial.
Attached to the agreement was a three-page appendix detailing arbitration procedures, among which was one which states: “Each party shall have the right to take the deposition of one individual and any expert witness designated by another party…to make requests for production of documents…[and] to subpoena witnesses and documents for the arbitration.” It further provides that “[a]dditional discovery may be had where the arbitrator selected pursuant to this agreement so orders, upon a showing of need.”
Dotson accepted the offer of employment, signed the agreement and began working for Amgen on Nov. 1, 2004. He was terminated in 2008, purportedly for violating certain of Amgen’s policies. Dotson filed a complaint a week later, alleging he was wrongfully terminated for whistle-blowing and that the arbitration agreement was both unconscionable and unenforceable.
Amgen moved to compel arbitration, but Ventura Superior Court Judge Henry J. Walsh denied the motion on the ground that the provision limiting the parties’ ability to take depositions was a “substantive flaw” since it “has the potential to work a fatal disadvantage to plaintiff.”
Walsh found the agreement unobjectionable in any other respect, but he declined to sever the discovery provision and enforce the remainder of the agreement based on his determination that doing so would require rewriting the agreement.
Writing for the appellate court, Justice Steven Z. Perren emphasized that “arbitration is meant to be a streamlined procedure” and “[l]imitations on discovery, including the number of depositions, is one of the ways streamlining is achieved.”
Perren cited Roman v. Superior Court (2009) 172 Cal.App.4th 1462 , in which Div. Seven held that the rules of the American Arbitration Association give an arbitrator authority to limit discovery and “to order such discovery, by way of deposition, interrogatory, document production, or otherwise, as the arbitrator considers necessary to a full and fair exploration of the issues in dispute, consistent with the expedited nature of the arbitration.”
He reasoned that the limitation on discovery in the Amgen agreement was “not different in any meaningful respect from the AAA rule approved in Roman.”
Although the Amgen agreement purported to limit discovery to one deposition of a natural person, the justice opined that it still gave the arbitrator “the broad discretion contemplated by the AAA rules to order the discovery needed to sufficiently litigate the parties’ claims,” and did not contain any other limitation on the arbitrator’s power to grant further discovery.
Even assuming the discovery provision were unconscionable, Perren said, the trial court had abused its discretion by refusing to sever it.
“Where, as here, only one provision of the agreement is found to be unconscionable and that provision can easily be severed without affecting the remainder of the agreement, the proper course is to do so,” he explained.
Joined by Presiding Justice Arthur Gilbert and Justice Paul H. Coffee, Perren concluded that the remainder of the agreement was not unconscionable and ordered the matter remanded for the trial court to enter an order granting Amgen’s motion to compel arbitration.
James A. Zapp, Paul W. Cane Jr. and Jessica P. Boskovich of Paul, Hastings, Janofsky & Walker, represented Amgen, along with Jonathan Fraser Light and Meghan B. Clark of Nordman, Cormany, Hair & Compton. Los Angeles attorney Rob Hennig represented Dotson
The case is Dotson v. Amgen, Inc., 10 S.O.S. 660.
Copyright 2010, Metropolitan News Company