Yuen

Introduction

This case involves a trial court order pursuant to Code of Civil Procedure section 1281.3 compelling consolidation of two arbitrations involving different claimants with identical employment agreements with the same defendant. The majority hold that a California trial court may not, under a state statute and over the objection of one of the parties, compel consolidation of two arbitrations that involve interstate commerce, and that the issue of consolidation should be left to the arbitrator. 1 The majority state that the case is governed by the Federal Arbitration Act, 9 U.S.C. section 1 et al. (FAA), and rely upon Green Tree Financial Corp. v. Bazzle (2003) 539 U.S. 444 [ 156 L.Ed.2d 414 , 123 S.Ct. 2402 ] (Green Tree), a case that dealt with a class arbitration rather than consolidation pursuant to a state statute.

I come to the same conclusion as the majority and explain why I do so. Interpreting the choice-of-law clauses in the agreements, I determine that the *1140 parties did not intend to incorporate state arbitration law, and that is why the FAA applies. In the past, a majority of federal courts have held that the FAA did not authorize the consolidation of…

In Green Tree Financial Corp. v. Bazzle (2003) 539 U.S. 444 [ 156 L.Ed.2d 414 , 123 S.Ct. 2402 ], the Supreme Court has held that in arbitration proceedings governed by the Federal Arbitration Act (FAA) ( 9 U.S.C. § 1 et seq.), where an arbitration agreement is silent on the issue of whether class-wide relief is available, an arbitrator, not a court, should resolve the class arbitration issue. In this case, which is also governed by the FAA, we hold that the arbitrator should likewise decide whether the parties’ arbitration agreement permits consolidation of two arbitration proceedings.

FACTS AND PROCEDURAL HISTORY

Petitioner Henry Yuen is the founder and former president of Gemstar. Petitioner Elsie Ma Leung is Gemstar’s former chief financial officer. Yuen developed the “VCR+” system that allows a viewer to videotape television programs using a five-digit code. TV Guide International acquired Gemstar, now known as “Gemstar-TV Guide International.” 1 Upon the sale of Gemstar to TV Guide, Yuen and Leung became Gemstar employees. As part of the acquisition, Yuen and Leung each signed five written agreements, collectively referred to as the “Restructuring Agreements.”…

Hogan & Hartson, Richard L. Stone, Anthony Basich, Neil R. O'Hanlon and Gary L. Urwin, Los Angeles, for Real Parties in Interest.

In Green Tree Financial Corp. v. Bazzle (2003) 539 U.S. 444 , 123 S.Ct. 2402 , 156 L.Ed.2d 414 , the Supreme Court has held that in arbitration proceedings governed by the Federal Arbitration Act (FAA) (9 U.S.C. § 1 et seq. ), where an arbitration agreement is silent on the issue of whether class-wide relief is available, an arbitrator, not a court, should resolve the class arbitration issue. In this case, which is also governed by the FAA, we hold that the arbitrator should likewise decide whether the parties' arbitration agreement permits consolidation of two arbitration proceedings.

Petitioner Henry Yuen is the founder and former president of Gemstar. Petitioner Elsie Ma Leung is Gemstar's former chief financial officer. Yuen developed the "VCR+" system that allows a viewer to videotape television programs using a five-digit code. TV Guide International acquired Gemstar, now known as "Gemstar-TV Guide International." [1] Upon the sale of Gemstar to TV Guide, Yuen and Leung became Gemstar employees. As part of the acquisition, Yuen…