Morgan Phillips, Inc. v. JAMS/Endispute, L.L.C.

If an arbitrator withdraws from an arbitration proceeding for no stated ethical reason following evidence and argument, and offers to continue mediation efforts but refuses to render an arbitration award, does the doctrine of arbitral immunity protect the arbitrator from suit? We hold that because such conduct defeats rather than serves the adjudicatory purpose of arbitration, arbitral immunity does not apply.

BACKGROUND

Plaintiff Morgan Phillips, Inc., appeals from the judgment dismissing its claims against defendants John B. Bates, JAMS/Endispute, L.L.C., and JAMS, Inc. The trial court entered the judgment after sustaining defendants’ demurrer to Morgan Phillips’s first amended complaint without leave to amend, on the ground that Morgan Phillips’s claims are barred by the doctrine of arbitral immunity. We reverse.

Morgan Phillips’s operative pleading is its first amended complaint. We set forth the facts in accordance with the standard governing demurrers: we assume the truth of all well-pleaded facts and accept as true all facts that may be implied or inferred from the facts alleged. (Thaler v. Household Finance Corp. (2000) 80 Cal.App.4th 1093, 1098 [ 95…