Monday, February 2, 2026
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Court of Appeal:
Arbitral Immunity Extends to False Advertising, Over-Billing
Justices Reject Argument That Protection for Arbitrators Is Linked to That Accorded Judges and Must Fall Where It Is Based on Purely Business Activities of Those Involved in Alternative Dispute Resolution
By a MetNews Staff Writer
Arbitral immunity extends protection to alleged false advertising to lure customers and to fraudulent billings, Div. Three of the Fourth District Court of Appeal has declared, affirming a judgment of dismissal of an action against a former member of that panel, Sheila Prell Sonenshine.
Sonenshine, now a mediator/arbitrator with JAMS, was an associate justice from 1982-1999. The dismissal of an action against her. brought by MRV Marketing, LLC (“MRV”, of San Juan Capistrano, and others, followed the sustaining of demurrers without leave to amend by Orange Superior Court Judge Craig L. Griffin.
Acting Presiding Justice Joanne Motoike authored the opinion, filed Thursday and not certified for publication. Motoike quoted, with approval, Griffin’s observation that “[t]he present case is the poster child for arbitrator immunity.”
Appellants’ Contentions
The parties to an arbitration were given a list of possible arbitrators; each could “strike” a JAMS neutral deemed to be unacceptable, with the others listed in order of preference. Darren M. Richie of the Beverly Hills firm of PRE, A.P.C., related in the appellants’ opening brief:
“Based on Respondent’s advertised experience as an entrepreneur with apparent experience in founding her own law firm and an international investment banking firm, Appellants opted not to strike Defendant from the list of ten, and ranked her at five of eight.”
After Sonenshine appeared to be confused in the course of the arbitration as to the issues, Richie said, further research on her background was undertaken and it was found that there had been two lawsuits against her: a class action fraud suit in which a bank she had founded was a co-defendant and litigation in which JAMS was also a defendant predicated on alleged misrepresentations in the profile the company provided on her. The lawyer wrote:
“Had the lawsuits been disclosed, Appellants would have stricken Respondent from their list of acceptable arbitrators and would not have consented to Respondent being selected as arbitrator.”
He remarked that “Appellants incurred over $50,000 in fees to an arbitrator they would have otherwise never selected.”
B&P Code Sections
The appellants sued Sonenshine for an alleged violation of the False Advertising Law (Business & Professions Code §17500 et seq.) and, as to the claim that Sonenshine’s “billing in the Arbitration was excessive and/or fraudulent,” under the Unfair Competition Law (Business & Professions Code §17200 et seq.),
There was also a cause of action for negligence but the dismissal of it was not contested on appeal.
Richie argued:
“Arbitral immunity exists as an analogue to judicial immunity, serving to protect arbitrators from civil liability their conduct related to determining an arbitration award. Conduct that cannot be directly correlated to similar judicial functions is not protected. Judges do not advertise, and they do not bill their time to the parties they adjudicate. Arbitrators, however, do advertise and try to entice litigants to contract their services, as opposed to the services of other arbitrators, for a fee. Given that these are non-judicial functions, if arbitrators commit tortious activity in relation to these functions affected litigants be allowed to seek relief from the courts. Holding otherwise would foreclose any possible remedy for litigants, and essentially make arbitrators the only private parties in California who can freely falsely advertise and fraudulently generate invoices with this Court’s blessing. That cannot be the case.”
Motoike’s Opinion
That can be and is the case, Motoike’s opinion indicates. The jurist wrote:
“We hold arbitral immunity bars all of the claims in the plaintiffs’ pleading. The cases are clear the scope of California’s common law arbitral immunity is broad and covers all functions integrally related to the arbitration process, including disclosures and administrative tasks.”
Motoike pointed to the 2010 Court of Appeal decision in La Serena Properties, LLC v. Weisbach. There, Div. Four of the First District Court of Appeal held that immunity applied in an action against an arbitrator who had failed to disclose to a party prior to the arbitration his “intimate” relationship with the sister of an opposing counsel.
“We agree with the trial court that the alleged claims of misconduct, no matter how pleaded, all arise out of the conflict of interest disclosure procedure that is integrally part of the arbitration process,” the appeals court held in La Serena.
Reasoning Applies
In Thursday’s opinion, Motoike said:
“Here, the information alleged to have been misrepresented did not pertain to conflicts of interest. But it did pertain to competence and Justice Sonenshine’s qualifications to serve as arbitrator. Competence, too, is central to a judge’s duties….Thus, the alleged failure to disclose information pertaining to Justice Sonenshine’s qualifications and competence is an act subject to arbitral immunity.”
Richie argued in the opening brief that La Serena is inapposite, explaining:
“[T]he facts of La Serena are easily distinguishable from those presented in the instant case. La Serna involved disclosures made after an arbitrator’s appointment.…The case did not involve questions of arbitral immunity as it relates to conduct that occurred before an arbitrator was selected, such as the tortious preselection activities at issue here.”
That, Sonenshine countered, in a brief by Jessica R. MacGregor of the San Francisco office of Long & Levitt, is “a distinction without a difference.”
Motoike agreed with Sonenshine, saying:
“When plaintiffs began reviewing Justice Sonenshine’s JAMS profile, she had already been proposed as a potential arbitrator. The conduct occurred during the process of selecting an arbitrator, which is integrally related to the arbitration itself.”
Allegedly Fraudulent Billing
Addressing the alleged fraudulent billing, the acting presiding justice commented:
“[B]ased on the allegations (which, we note, are based only on information and belief), this is simply another way of alleging that Justice Sonenshine mishandled the arbitration or displayed a lack of diligence or competence….[S]uch alleged misconduct is covered by the arbitral immunity.”
The case is MRV Marketing v. Sonenshine, G064003.
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