Business Litigation

Litigants facing a trial court’s denial of an attempt to compel arbitration may find themselves surprised by a significant change in California law that recently became effective on January 1, 2024: An appeal from an order denying or dismissing a petition to compel arbitration no longer automatically stays trial court proceedings. This reversal by the California Legislature from the historic norm—where an appeal would automatically stay trial court proceedings—amended Civil Code of Procedure Section 1294(a) and now gives trial court judges discretion to stay or continue proceedings. The amendment took effect this year after moving through the Legislature as California Senate Bill No. 365 (SB 365) and was approved by Governor Newsom on October 10, 2023.

An allegedly indefinite contract may not be enforceable for two reasons: First, the contract may be too indefinite for the court to administer—no remedy can be properly framed. Second, the indefiniteness of the contract may show a lack of contractual intent. Nevertheless, a contract need not specify price if price can be objectively determined. The absence of a price provision does not render an otherwise valid contract void.

In deciding a motion to disqualify a likely advocate-witness notwithstanding client consent, courts are required to consider multiple factors, including: (1) whether counsel’s testimony is, in fact, needed; (2) the possibility of using the motion to disqualify for purely tactical reasons; and (3) any prejudice to the opposing party and potential injury to the integrity of the judicial process. A motion to disqualify should not be granted absent factual findings of potential injury to the judicial process.

Arbitration is a contractual creation, intended to provide flexibility in the resolution of disputes that is usually invoked to achieve a relatively swift and inexpensive resolution. But in California, it sometimes can be invoked to achieve the opposite effect: adding another layer of litigation on top of the three-tiered state court system.

Trial courts are not required to take on the moving party’s burden of identifying specific claims or allegations susceptible to a special motion to strike under California’s anti-SLAPP law. When defendants file an anti-SLAPP motion that seeks to strike the entire complaint but does not identify specific claims or allegations that should be stricken even if the entire complaint is not, the trial court can properly deny the motion so long as it concludes that the complaint presents at least one claim that did not arise from anti-SLAPP protected activity.