Blog #19 (Arbitration Discovery Orders May Be Challenged in Court By Third Parties; Randy Jones)

By Raines Feldman LLP on February 8, 2012 7:00 AM

I would like to thank my colleague Zach Mayer for this week's legal portion.

Unlike jury verdicts and trial court rulings, arbitration awards are non-appealable in most instances. Recognizing the finality of an arbitrator's decision is appropriate because the parties have agreed that the decision would be final. Arbitration by agreement is generally consensual and voluntarily, and once that consent is given the arbitrator's authority to decide the matter is basically sacrosanct. Consequently, judicial review of arbitration decisions is sharply limited - even where possible errors of fact or law are involved. But those same limitations on judicial review do not apply to non-parties to an arbitration who seek to challenge an arbitrator's discovery order.


Such was the holding in Berglund v. Arthroscopic & Laser Surgery Center of San Diego, L.P. (2008) 44 Cal.4th 528, which addressed the right of a third party to contest an arbitrator's order requiring it to produce documents in an arbitration. Berglund filed suit for battery, negligence and breach of fiduciary duty against a surgery center (the "Center") and several physicians, claiming that one of them was impaired by his abuse of narcotics at the time he treated Berglund. Berglund's case against the doctors went to arbitration because there was an arbitration agreement between those parties, while his case against the Center, which was not a party to the arbitration agreement, proceeded in superior court.

In the court proceeding, Berglund moved to compel the Center to produce certain documents in discovery. The court denied the motion on the ground that documents were statutorily privileged. Years later, in the arbitration between Berglund and the doctors, Berglund served the Center, which was not a party to the arbitration, a subpoena for the very same documents he had sought in the superior court case. The arbitrator ordered the Center to produce the documents for an in camera review. Meanwhile, the Center filed a motion in the superior court for a protective order, which the court denied on the ground that it had no jurisdiction over the discovery subpoena served in the arbitration proceeding.

On appeal, the order denying the Center's motion for a protective order was reversed. California's Supreme Court affirmed the reversal, observing that while all discovery disputes arising from arbitration must be submitted to the arbitrator in the first instance, third parties are entitled to full judicial review of the arbitrator's order. The Court based this ruling on its reading of the applicable statutory law as well as public policy that favors protecting the legal rights of third parties who have not consented to arbitration or the finality of arbitrator decisions.

Now for the Opening Day memory...

Randy Jones-400.jpgRandy Jones is probably the San Diego Padres most well known pitcher and definitely the only one with his number retired (#35). Randy played from 1973-1980 with the Padres and finished his career in 1981-1982 with the New York Mets. After losing 22 games in the 1974 season (many believe you have to be a good pitcher to be in the position to lose more than 20 games in a season), Randy won the National League Comeback Player of the Year award in 1975 after winning 20 games and leading the league in ERA. Then, for an encore, he had even a better year in 1976, winning 22 games, pitching over 300 innings and an astounding 25 complete games and ultimately winning the National League Cy Young award. Unfortunately for Randy and the Padres, his career peaked in 1976 and he was never the same pitcher thereafter. The Padres finally traded him to the Mets after the 1980 season and his career ended after the 1982 season. Interestingly, Randy is the only Cy Young winner to not have a career winning record. But during the 1975 and 1976 seasons, he was lights out.

Here are Randy's Opening Day memories.

"1974 was my first Opening Day with San Diego. Ray Kroc owned the Padres. It was classic - we weren't playing that well against the Houston Astros, and Ray got on the public address system and apologized to the fans for our poor performance, which ticked off quite a few of our veteran players. Me being a rookie I didn't say too much. He was half way through his apology when a streaker - streakers were big back then - ran across the field and slid into second, and Ray is screaming over the PA system to get that guy off the field! It was pretty hilarious! We didn't play baseball very well but it was pretty funny. That was my first Opening Day experience and I think it was pretty unique.

"I had a great Opening Day in 1975. I was the starting pitcher. I was very nervous. The year before I was 8-22. Against the San Francisco Giants, on Opening Day, we got rained out, of all things. That's ok - you relax and gear up for the next day. But we got rained out the next day also. And it never rains in San Diego! Now I was getting a little tense. On the third day we got the game in. I faced Jim Barr of the Giants. I went nine innings, gave up four hits and the score was 0-0. The year before I hadn't gotten much run support either, and I was afraid it was starting off to be just like 1974. I ended up losing in 10 innings, but I went on to have a great year.

"1976 was the ultimate for me. I was runner-up to Tom Seaver for the Cy Young the previous year. I started in front of a full house against the Atlanta Braves. I thought the crowd was amazing - we had a sellout, around 50,000 people. Roger Craig, our pitching coach, and I went out to the bullpen to warm up before the game, and he walked out with me. People started to stand up as we left the dugout and they gave me a standing ovation - that's 50,000 people on their feet giving me a standing ovation just walking out to the bullpen to warm up! First of all, on Opening Day you're nervous as heck, no matter how many years you've been playing. It gets your adrenaline going and you're nervous. The standing ovation really made me more nervous - people appreciating the year I had in '75. Roger Craig looked at me as we're walking to the bullpen, and it's his first game back in a Padre uniform and he says, "Man, can you believe how much these people just love me?!" I cracked up. That was one of 20 standing ovations I received that year in San Diego - every start at Jack Murphy stadium. It was a great experience, and a great start to an incredible season for me, going on to win the Cy Young award."

Although Randy didn't get the win in the 1975 opener, he did pitch nine shutout innings. But he did get the Opening Day win in 1976 - an 8-2 victory in one of his 25 complete games.

See you in two weeks. Richie