Temporary Judges: An Overlooked Alternative

Association of Business Trial Lawyers, Summer 2002

by Lawrence C. Waddington

    Federal and State courts continue to endorse arbitration as an alternative to litigation, but legislative and judicial inroads into the process have emerged. In EEC v. Waffle House, Inc. 122 S.Ct. 754 (2002), the United States Supreme Court permitted the federal administrative agency to file litigation against an employer alleging workplace violations despite absence of any interest by the employee other than lodging the initial complaint. In Wright v. Universal Maritime Service Corp., 525 U.S. 70 (1998), the Court held that Title VII litigation filed by union members is not within the ambit of collective bargaining agreements and permitted an employee to file a complaint against the employer for an identical grievance. In Green Tree Financial Corp. v. Randolph. 531 U.S. 79 (2000), the Justices deferred a definitive ruling on a challenge to arbitration fees imposed on employees who alleged financial inability to vindicate statutory rights, but Circuit Courts are in disagreement on the scope of the Green Tree decision; Bradford v. Rockwell Semiconductor Systems, Inc., 238 F.3d 549 (4th Cir.2000); Blair v. Scott Specialty Gases, 2002 WL 389281 (3d Cir.); Perez v. Globe Airport Security Services, Inc., 252 F.3d 1280 (11th Cir. 2001).

At the State level, the California Supreme Court has discovered a right to faux due process in arbitration of employee claims against an employer, and mandated discovery to mitigate a perceived economic imbalance between the parties; Armendariz v. Psychare Services, Inc., 24 Cal.4th 83 (2000). Elimination of discovery is one of the hallmarks of arbitration, but Armendariz now invites employers and employees to engage in familiar "paper wars" the California Legislature intended to inter. California Courts of Appeal have written decisions resurrecting the contractual doctrine of "unconscionability" to void arbitration clauses in opinions of labyrinthian rhetoric. The Ninth Circuit has found a similar defect in arbitration clauses; Circuit City Stores, Inc. v. Adams, 279 F. 3d 889 (9th Cir. 2002).

Whether these judicial decisions lack merit or are salutary devices to achieve fundamental fairness in the arbitration process is not the issue. The appeals exemplify a "litigization" of arbitration fostering innumerable quintessential legal issues; i.e., the role of arbitrability pre-emption, contract interpretation, venue, choice of law, collateral estoppel, and appeal. Differences in procedural rules of the Federal Arbitration Act (9 U.S.C.  1 et. seq.) and the California Arbitration Act (CCP  1280 et. seq.) continue to surface, and California courts are not averse to rejecting Ninth Circuit opinions. Lawyers anticipating an expedited resolution of a dispute in arbitration may despair at constant judicial intervention in a process intended to exclude the courts.

If dissatisfaction with the courts is not enough, the Legislature in California will require arbitrators to undergo intensive scrutiny of their financial, business and social obligations. CCP  1281.9, enacted only a few years ago, is amended to require stringent disclosure rules, add non-disclosure as a ground for vacating an award (CCP  1286.2 (a) [6]), and specify grounds for disqualification of an arbitrator (CCP  1281.91). A newly enacted statute, effective July 1, 2002. requires arbitrators to subscribe to Canons of Judicial Ethics; CCP  1281.85. No one doubts the importance of an impartial arbitrator and the need for complete disclosure, but the new rules invite potential for additional delay and a basis for expansion of the appeal process.

Despite these developments, arbitration continues to offer an expeditious alternative to litigation in the majority of cases. Except for anecdotal horror stories, lawyers continue to support voluntary arbitration mutually agreed by both parties and not imposed unilaterally. But arbitrators are not bound by statutory and decisional law, and lawyers may prefer a procedure implementing California substantive and procedural law. Or, counsel may desire a mechanism to preserve the right of appeal currently limited in arbitration; CCP  1294. A California statute permits an alternative and seldom utilized procedure that maintains the structure of a trial, permits discovery, preserves the right of appeal and enjoys some of the advantages of arbitration.

Article VI, Section 21 of the California Constitution permits parties to obtain the services of a "Temporary Judge" to conduct a trial in compliance with California law. The administrative costs are comparable to arbitration and its expeditious advantages preserved. All parties can select any active member of the State Bar or retired judge in whom they repose confidence. A Temporary Judge can hold the trial at the convenience of parties, impose requirements of all Codes, issue an opinion and confirm the decision in a judgment.

Compared to the element of confidentiality inherent in arbitration, the parties may not necessarily achieve a comparable degree of privacy. Recently amended CRC Rule 244 (f) requires an accessible and public site for the hearing if requested by "any person," i.e. the media. Temporary Judges must comply with disclosure requirements comparable to arbitrators (CRC 244[c]) and abide by specific Canons of Judicial Ethics. If requested by the parties, a Temporary Judge must write a statement of decision (CCP  632), thereby preserving the right to appeal and potentially exposing the trial to publication in an appellate court opinion.

If parties agree to a hearing before a Temporary Judge paralleling that of a Superior Court judge, the privacy of arbitration is lost in exchange for an expeditious, but public, trial conducted in compliance with California law. Restrictions on the use of jurors suggests that the principal option for counsel is a court trial; CRC 244[c].

No system of dispute resolution, whether mediation, arbitration, or litigation will universally satisfy participants participating in an adversarial system. Jury trials continue to form the bulwark of the civil caseload but are subject to decision by a panel of strangers. Trials are reviewable on appeal, but cost is often a significant factor for parties in selecting arbitration to achieve finality. Alternatively, arbitration restricts discovery in exchange for a resolution. In the absence of jurors, a Temporary Judge provides a judicial forum as expeditious as arbitration albeit a public one.

For parties who have completed discovery, are indifferent to and desire a decision in compliance with a California law, a Temporary Judge offers an alternative. The process mirrors the advantage of arbitration and litigation for parties who do not labor under economic disadvantage, are oblivious to potential publicity, and agree to potentially fund the cost of appeal. Not only can counsel dispense with time consuming jury selection, jury instructions, side bar side bar conferences, and jury deliberation, the opportunity exists for stipulations to truncate presentation of evidence otherwise necessary for juries.

Use of Temporary Judge is neither a panacea nor without legitimate concerns for lawyers. If parties elect to attempt settlement, counsel may express reluctance to disclose damages, demands and offers to the judge who will hear the case in the event of an inability to resolve the dispute. Or, should the parties bring their discovery disputes to the judge who will try the case? If one party seeks sanctions and the judge imposes monetary or evidentiary restrictions, the other party understandably contemplates whether the discovery decision augers an adverse decision. Every method of dispute resolution imports advantages and disadvantages. Temporary Judges are no exception but are another option for counsel.

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