In a somewhat curious decision, the California Court of Appeal, Fourth
Appellate District, ruled that a JAMS arbitrator's religious beliefs and cultural
affiliations and background were not relevant and did not need to be disclosed in
accordance with the California Arbitration Act.
The instant decision occurred in the matter Herbert Rebmann v. Peter
Rohde, 2011 DJDAR 9676 ("Rebmann Case"). In the Rebmann Case, a
commercial litigation matter involving an operating agreement for a joint
venture which was formed to distribute nutritional supplements in North
America, claimant Peter Rohde and an entity Rhode controlled ("Rhode Parties")
initiated arbitration proceedings seeking to hold Herbert Rebmann and an entity
Rebmann controlled ("Rebmann Parties") liable for substantial monetary
damages, arguing that the Rebmann Parties induced the Rohde Parties into the
joint venture by intentionally and recklessly misrepresenting various material
facts.
The arbitration was conducted before the Judicial Arbitration Mediation
Services ("JAMS"). When the parties could not agree on a mediator, JAMS
selected Stephen E. Haberfeld, a respected retired federal magistrate. JAMS
provided a ten page arbitration disclosure checklist covering a lengthy list of
items under the Code of Civil Procedure and the California Rules of Ethics
Standards. The document also required Judge Haberfeld to declare that he had
made a "reasonable effort to inform [him]self of any matters that could cause a
person aware of the facts to reasonably entertain a doubt that as the proposed
arbitrator [he] would be able to be impartial".
The subject dispute was arbitrated over a period of 33 months, concluding
with a seven day session in January 2009. In the arbitrator's lengthy decision, the
arbitrator concluded that the Rohde Parties had failed "to sustain [their] burden
of proof" on any of their claims and ruled in favor of the Rebmann Parties on
their counterclaims, but only awarded nominal damages of $1,000.00. However,
Judge Haberfeld found that the Rebmann Parties were the "prevailing party"
The Morrison Law Journal
July 2011
Volume VI, Edition 7
When Far Afield Is Too Far Afield: Court of Appeal Rules That
Arbitrator's Ethnic Background And Religious Beliefs, When Not
Relevant To An Arbitrable Issue, Need Not Be Disclosed
By: Edward F. Morriso
n, Jr., Esq.
Larry A. Schwartz, Esq.
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under the operating agreement, and awarded $1,136,000.00 in attorneys' fees and
costs, in addition to the $1,000.00 in damages.
Thereafter, the Rohde Parties claimed that they conducted internet
research and found that Judge Haberfeld and his family lost family property in
the Holocaust, and were members of the "1939 Club", an organization dedicated
to avoiding a repeat of the Holocaust. Mr. Rohde also filed a declaration
indicating that he was born in Berlin in 1943, that his father served in the German
Army during World War II, that his father in law was a member of the
Schutzstaffel (commonly referred to as the SS) and that he defected from East
Germany when he was 18. He further stated in his declaration:
"Had I known about his [Haberfeld's] religious affiliation,
his cultural affiliation, and the dedication to keeping the
memory of the Holocaust alive, I would never have allowed
him to be the arbitrator in my case".
The Trial Court denied the Rohde Parties' Motion to Set Aside the
arbitration award, and also denied a request by the Rohde Parties to take Judge
Haberfeld's deposition (Haberfeld filed a Motion for Protective Order). On
appeal, the Court of Appeal ruled that the California law on point, and
specifically citing Haworth v. Superior Court (2010) 50 Cal.4th 372, and Code of
Civil Procedure ยง1281.9, in no way require the disclosure of the arbitrator's
religious background or cultural affiliations, when those issues have nothing to
do with the underlying dispute.
The Rebmann decision is a sound decision which should put to rest the
matters that arbitrators should place into disclosure. However, it is also a
reminder that, if the background of the arbitrator would be relevant to a
particular issue in a case, a disclosure be required.
About the Authors: Edward F. Morrison, Jr. is the founding partner and Larry A.
Schwartz is Of Counsel to The Morrison Law Group, a professional corporation.
Their biographies can be viewed at www.morrisonlawgroup.com.
Publication Note: The Morrison Law Group wishes to disseminate this
publication to all clients and colleagues of the Firm who wish to receive it.
Should any recipient desire to be removed from the distribution list, or wishes to
have a colleague added, please contact Jim Van Dusen at The Morrison Law
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Disclaimer Note: The legal article presented above is intended to provide
general information which may be of interest or use to clients and colleagues of
The Morrison Law Group and should not be construed as legal advice on any
matter.
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