Ct.App. 2/5 No. B204354 Los Angeles County Super. Ct. No. SC082441 Allan J. Goodman.
The opinion of the court was delivered by: George, C. J.
The superior court vacated an arbitration award in a case involving the claim of a female patient that her physician was negligent in performing plastic surgery on her lip. The basis of the court's action was that the neutral arbitrator had failed to disclose a matter "that could cause a person aware of the facts to reasonably entertain a doubt that the... neutral arbitrator would be able to be impartial." (Code Civ. Proc., § 1281.9, subd. (a).)*fn1 The question before us is whether the neutral arbitrator, a former judge of the superior court, was required to disclose to the parties the circumstance that, 10 years earlier, he received a public censure based upon his conduct toward and statements to court employees, which together created "an overall courtroom environment where discussion of sex and improper ethnic and racial comments were customary." (In re Gordon (1996) 13 Cal.4th 472, 474.) We conclude the arbitrator was not required to disclose this public censure, and therefore reverse the decision rendered by the Court of Appeal.
In 2003, petitioner Randal Haworth (Haworth), a medical doctor, performed cosmetic lip surgery upon real party in interest Susan Ossakow (Ossakow). Subsequently, Ossakow filed an action against Haworth alleging battery and medical malpractice. Based upon an arbitration agreement, the parties stipulated to binding arbitration of Ossakow's claims. That agreement provided for a panel of arbitrators composed of one arbitrator selected by each party and a neutral arbitrator jointly chosen in turn by those two arbitrators.
Both parties agreed to the appointment of retired Los Angeles County Superior Court Judge Norman Gordon as the neutral arbitrator. In his disclosure statement, required by section 1281.9, Judge Gordon stated that he had been involved in legal proceedings with other members of defense counsel's firm, but had no other information to report.
At the arbitration hearing, Ossakow, who previously had undergone several other cosmetic surgeries performed by various physicians, contended that she had not consented to the particular surgical procedure employed by Haworth, that the use of that procedure fell below the standard of care, and that the procedure had caused her numerous problems, including stiffness and numbness in her lips and an asymmetrical smile. The panel, in a split decision authored by Judge Gordon, issued its award in favor of Haworth. In written findings, the arbitrators concluded that Ossakow had not established lack of consent by a preponderance of the evidence, noting that the testimony of the two parties was in conflict concerning whether Ossakow had been informed regarding the surgical procedure to be employed. The arbitrators also concluded that Haworth's use of the selected surgical procedure did not fall below the standard of care, noting that the medical experts of the two parties disagreed on the standard of care, that even Ossakow's expert was equivocal on the question of causation, and that the testimony of Haworth's expert regarding the standard of care and causation was more compelling.
Two months later, in April of 2007, Ossakow learned that in 1996, Judge Gordon, who was appointed to the trial bench in 1983, had been publicly censured by this court for engaging in " 'conduct prejudicial to the administration of justice that brings the judicial office into disrepute.' " (In re Gordon, supra, 13 Cal.4th 472, quoting Cal. Const., art. VI, § 18, subd. (c)(2).) This court had adopted the findings of the Commission on Judicial Performance "that between April of 1990 and October 27, 1992, Judge Gordon on several occasions made sexually suggestive remarks to and asked sexually explicit questions of female staff members; referred to a staff member using crude and demeaning names and descriptions and an ethnic slur; referred to a fellow jurist's physical attributes in a demeaning manner; and mailed a sexually suggestive postcard to a staff member addressed to her at the courthouse. None of the conduct occurred while court was in session or while the judge was on the bench conducting the business of the court. [¶]... While the actions were taken in an ostensibly joking manner and there was no evidence of intent to cause embarrassment or injury, or to coerce, to vent anger, or to inflict shame, the result was an overall courtroom environment where discussion of sex and improper ethnic and racial comments were customary." (Id., at pp. 473-474.)*fn2
Ossakow filed a petition in the superior court seeking to vacate the arbitration award on the ground, among others, that Judge Gordon had failed to disclose this public censure. That court vacated the award, concluding "a reasonable person would question whether he could be impartial in this case." Haworth filed a petition for writ of mandamus to reinstate the award,*fn3 which the Court of Appeal denied in a summary order. This court granted review and transferred the matter back to the appellate court with directions to issue an alternative writ of mandate.
After issuing the writ, the Court of Appeal filed an opinion denying the petition. In its opinion, the appellate court concluded that there was a conflict in the law concerning the correct standard of review, but that there was no need to resolve the conflict, because its decision would be the same whether the superior court's order vacating the award was reviewed de novo or under a substantial evidence standard. The appellate court rejected Haworth's argument that no disclosure was required because the censure was a matter of public record. It framed the question as "whether an ' "average person on the street" ' aware of the facts would harbor doubts as to the arbitrator's impartiality." (Quoting United Farm Workers of America v. Superior Court (1985) 170 Cal.App.3d 97, 104 (United Farm Workers).) The Court of Appeal concluded that because Judge Gordon was publicly censured in part for "disparaging female associates based on their physical attributes," "a person aware of Judge Gordon's censure might reasonably entertain a doubt as to his ability to be impartial in a case involving a woman's cosmetic surgery."
The California Arbitration Act (§ 1280 et seq.) "represents a comprehensive statutory scheme regulating private arbitration in this state." (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 9 (Moncharsh).) The statutory scheme reflects a "strong public policy in favor of arbitration as a speedy and relatively inexpensive means of dispute resolution." (Ericksen, Arbuthnot, McCarthy, Kearney & Walsh, Inc. v. 100 Oak Street (1983) 35 Cal.3d 312, 322.) "[I]t is the general rule that parties to a private arbitration impliedly agree that the arbitrator's decision will be both binding and final." (Moncharsh, supra, 3 Cal.4th at p. 9.)
Generally, in the absence of a specific agreement by the parties to the contrary, a court may not review the merits of an arbitration award. (Cable Connections, Inc. v. DIRECTV, Inc. (2008) 44 Cal.4th 1334, 1344-1345.) Although the parties to an arbitration agreement accept some risk of an erroneous decision by the arbitrator, "the Legislature has reduced the risk to the parties of such a decision by providing for judicial review in circumstances involving serious problems with the award itself, or with the fairness of the arbitration process." (Moncharsh, supra, 3 Cal.4th at p. 12; see §§ 1286.2 [grounds for vacation of award], 1282.6 [grounds for correction of award].)
The statutory scheme, in seeking to ensure that a neutral arbitrator*fn4 serves as an impartial decision maker, requires the arbitrator to disclose to the parties any grounds for disqualification. Within 10 days of receiving notice of his or her nomination to serve as a neutral arbitrator,the proposed arbitrator is required, generally, to "disclose all matters that could cause a person aware of the facts to reasonably entertain a doubt that the proposed neutral arbitrator would be able to be impartial." (§ 1281.9, subd. (a).) Based upon these disclosures, the parties are afforded an opportunity to disqualify the proposed neutral arbitrator. (§ 1281.91, subds. (b), (d).) If an arbitrator "failed to disclose within the time required for disclosure a ground for disqualification of which the arbitrator was then aware," the trial court must vacate the arbitration award. (§ 1286.2, subd. (a)(6)(A).)
The applicable statute and standards enumerate specific matters that must be disclosed. The arbitrator must disclose specified relationships between the arbitrator and the parties to the arbitration, including involvement in prior arbitrations, an attorney-client relationship with any attorney involved in the arbitration, and any significant personal or professional relationship with a party or an attorney involved in the arbitration. (§ 1281.9, subd. (a)(3)-(6).) The arbitrator also must disclose "any ground specified in Section 170.1 for disqualification of a judge," as well as "matters required to be disclosed by the ethics standards for neutral arbitrators adopted by the Judicial Council." (§ 1281.9, subd. (a)(1), (2); see Cal. Ethics Stds. for Neutral Arbitrators in Contractual Arb. (Ethics Standards).) The Ethics Standards require the disclosure of "specific interests, relationships, or affiliations" and other "common matters that could cause a person aware of the facts to reasonably entertain a doubt that the arbitrator would be able to be impartial." (Ethics Stds., com. to std. 7.) Specific matters that must be disclosed include, for example, the arbitrator's financial interest in a party or the subject of the arbitration, the arbitrator's knowledge of disputed facts relevant to the arbitration, and the arbitrator's "membership in any organization that practices invidious discrimination on the basis of race, sex, religion, national origin, or sexual orientation." (Ethics Stds., std. 7(d)(13); id, std. 7(d)(9), (10), & (12).)
Neither the statute nor the Ethics Standards require that a former judge or an attorney serving as an arbitrator disclose that he or she was the subject of any form of professional discipline. At issue here is the general requirement that the arbitrator disclose any matter that reasonably could create the appearance of partiality.
In the Court of Appeal, both parties suggested that the superior court's order vacating the arbitration award, based upon Judge Gordon's failure to disclose the public censure, should be reviewed under a de novo standard because the facts were not in dispute. The Court of Appeal's opinion stated that although some cases have applied this standard to such review when the facts were not in dispute,*fn5 the weight of authority supports application of a substantial-evidence standard even when the facts are undisputed, treating the question of whether the circumstances of the case require disclosure as a factual determination for the superior court.*fn6 As noted above, the Court of Appeal declined to resolve this question, concluding that its decision would be the same under either standard. We asked the parties to brief the issue.
Haworth contends that there is no dispute concerning the facts, that the superior court's decision that disclosure was required poses a mixed question of fact and law, and that mixed questions should be reviewed de novo. Ossakow contends that the facts are in dispute and that, in any event, the abuse-of-discretion standard should apply; her position is that the superior court's decision should be upheld if its factual findings are supported by substantial evidence and its application of the law to the facts is not arbitrary or capricious.*fn7
In the context of a claim that an arbitrator exceeded his or her powers, we have stated that the superior court's decision is subject to de novo review. (Advanced Micro Devices, Inc. v. Intel Corp. (1994) 9 Cal.4th 362, 376, fn. 9.) We have not addressed the standard applicable to review of the superior court's decision when the award has been challenged in that court on the ground that the arbitrator failed to disclose circumstances creating an appearance of partiality.*fn8 For the reasons discussed below, we conclude that the superior court's order should be reviewed de novo.
As a threshold matter, the material facts are not in dispute. The wording of Judge Gordon's public censure and the underlying information Ossakow contends should have been disclosed by him are set out in this court's earlier opinion and are not in dispute. (In re Gordon, supra, 13 Cal.4th 472.) Ossakow attempts to support her assertion that factual disputes exist in the present case by citing her declaration, filed in the superior court, in which she stated she would not have agreed to have Judge Gordon serve as an arbitrator had she known he had been publicly censured for demeaning and degrading treatment of women. Haworth does not dispute the truth of Ossakow's statement but, in any event, the statement is not material. In the event Ossakow establishes that Judge ...