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Cox California Telecom, LLC v. Global NAPs California, Inc.

California Court of Appeals, First District, First Division
Oct 14, 2009
No. A124213 (Cal. Ct. App. Oct. 14, 2009)

Opinion


COX CALIFORNIA TELECOM, LLC, Plaintiff and Respondent, v. GLOBAL NAPs CALIFORNIA, INC., Defendant and Appellant. A124213 California Court of Appeal, First District, First Division October 14, 2009

NOT TO BE PUBLISHED

San Francisco City & County Super. Ct. No. CPF-07-507194

Banke, J.

I. Introduction

The sole issue in this appeal is whether the decision of the California Public Utilities Commission at issue in this case is an arbitration award subject to confirmation under Code of Civil Procedure section 1285 et seq. We hold it is not, and reverse.

II. Background

We set forth the facts to the extent necessary to address the issue on appeal. The parties to this appeal, Global NAPs California, Inc. (Global) and Cox California Telecom, LLC (Cox), are both competitive local exchange carriers (CLECs) as defined in the federal Telecommunications Act of 1996 (the Act). (47 U.S.C. §§ 251, 252.) The Act requires telecommunication companies to “interconnect,” allowing customers of different telecommunication companies to send and receive calls from each other. The telecommunication companies effectuate this interconnection through “interconnection agreements” (ICAs). (Ibid.)

On October 29, 2003, Cox and Global entered into an ICA covering three types of telecommunications traffic. The type at issue here is “IntraLATA Toll Traffic,” defined in the parties’ ICA. In June 2004, Cox began billing Global for terminating the IntraLATA Toll Traffic of Global’s customers. Global refused to pay, claiming (a) the traffic was “Voice over Internet Protocol” (VoIP) transmissions for which the ICA did not require payment and (b) the Federal Communications Commission (FCC) had preempted “California’s intrastate access charge regime.”

The parties’ ICA includes a paragraph entitled “Dispute Resolution,” which provides: “Any dispute between the Parties regarding interpretation or enforcement of this Agreement or any of its terms shall be addressed by good faith negotiation between the Parties, in the first instance. Should such negotiations fail to resolve the dispute in a reasonable time, the Parties may, upon mutual agreement, submit the matter to alternative dispute resolution (‘ADR’) or, in the absence of such an agreement, either Party may initiate an appropriate action in any regulatory or judicial forum of competent jurisdiction.”

On April 28, 2006, Cox filed a complaint against Global for breach of the ICA before the California Public Utilities Commission (CPUC). Cox alleged the CPUC had “jurisdiction” as follows: “Section 24.8 of the [ICA] contains the parties’ agreement on how to resolve billing disputes. In particular, Section 24.8.4 requires the parties to engage in informal dispute resolution efforts. Cox has attempted, through discussions with representatives of Global NAPs, to resolve the issues presented in this complaint. In addition, Cox and Global NAPs participated in a mediation effort with staff of the [FCC]. None of these efforts were successful at resolving the dispute.”

Pursuant to CPUC procedural rules, Cox also filed a categorization statement. Cox indicated the matter should be categorized as “adjudicatory” and a hearing might be necessary “depending on the extent to which the assigned Administrative Law Judge or the Commission require Cox to provide factual evidence and/or testimony to support any of the factual issues alleged in Cox’s complaint.” Cox also proposed a “schedule” for: Global’s answer, a prehearing conference, issuance of a scoping memo (defined and required by CPUC procedural rules), opening written testimony, reply written testimony, hearings, reply briefs, draft decision, comments on draft decision and the final decision.

Proceedings before the CPUC are governed by chapter 9 of the Public Utilities Act (Pub. Util. Code, § 1701 et seq.) and procedural rules adopted by the CPUC (Cal. Code Regs., tit. 20, § 1.1 et seq.).

On June 9, 2006, Global filed a motion to dismiss or stay the action, arguing, inter alia, that the FCC has preempted state regulation of intercarrier compensation. Global also filed an answer. Cox filed opposition to the motion to dismiss or stay on June 26, 2006, and the assigned administrative law judge (ALJ) denied the motion on July 5, 2006. In his ruling, the ALJ observed if the CPUC “has jurisdiction to arbitrate this dispute, it appears to be a straightforward case of contract interpretation” and “[i]n the absence of federal pre-emption... this is precisely the sort of question that the FCC has empowered state commissions to resolve via arbitration proceedings.” The ALJ concluded state regulation of intrastate access charges was not preempted by the FCC and there was no “good cause why this arbitration should not go forward.”

We take judicial notice of the pleadings filed with the CPUC. (Evid. Code, §§ 452, subds. (c)-(d), 459.)

On September 15, 2006, Cox filed a motion for summary judgment. Global filed opposition, and Cox filed a reply. The motion initially was heard by the ALJ, who issued a proposed decision granting the motion on November 17, 2006. After comments were received, the CPUC issued an “Opinion Granting Complainant’s Motion for Summary Judgment” on January 11, 2007. The CPUC noted that in his July 5, 2006 ruling, the ALJ concluded the CPUC was not preempted “from arbitrating this dispute.” The CPUC also “confirmed” the classification of the proceeding as “adjudicatory” and concluded no hearing was required given its granting of the motion for summary judgment. The CPUC set forth its “Findings of Fact” and “Conclusions of Law” (which included that there were no triable issues of material fact) and ordered Global to pay Cox “the sum of $985,439.38 plus interest on overdue sums at the rate of one and one-half percent per month, as provided in the [ICA] between the parties” plus “termination fees for any intraLATA toll calls originated by Global NAPs and terminated by Cox.” The order was effective immediately.

On February 13, 2007, Global sought rehearing. On February 15, 2007, Cox filed a motion for an order “Requiring Global Naps... to Comply with Decision 07-01-004 and Imposing Sanctions on Global Naps....” Cox stated the “decision granted summary judgment to Cox on an interconnection dispute between the two companies and ordered Global NAPs to pay to Cox past due charges for intraLATA access services, plus interest.” Cox asserted failure to abide by a CPUC decision “is punishable both by financial penalties and by criminal charges” and requested “an order directing Global NAPs to pay the amounts due to Cox.” Cox additionally sought $20,000 per day in sanctions and revocation of Global’s certificate of public convenience and necessity. On March 2, 2007, Global sought a stay of the CPUC’s opinion pending decision on Global’s application for rehearing.

On March 23, 2007, the assigned commissioner and the ALJ issued a joint ruling granting Cox’s motion, setting a hearing for April 9, 2007, and ordering Global to appear and show it had paid Cox or, if it had not, why it should not have its certificate of public convenience and necessity suspended for failure to comply with the CPUC’s decision. At the April 9 hearing, Global’s counsel introduced an affidavit of Global’s treasurer, stating Global had no liquid assets, and no California real estate or bank accounts. On April 12, 2007, the commissioner and the ALJ issued another joint order directing Global to identify “any source of funds” to which its creditors could look for satisfaction of Global’s debts. Global filed another declaration of its treasurer on April 19, 2007, which indicated Global had no assets, and “directing its creditors to look to their legal remedies....”

On June 21, 2007, the CPUC issued an opinion stating there was “no doubt” Global was in violation of its prior opinion and suspending Global’s certificate of public convenience and necessity until it complied with the decision ordering payment to Cox. On June 29, 2007, Global filed a petition for a writ of review in the Second District Court of Appeal, which was denied because Global failed to seek rehearing of the CPUC’s opinion suspending its certificate of public convenience and necessity.

We also take judicial notice of the pleadings filed in the Second District Court of Appeal, in case No. B200164. (Evid. Code, §§ 452, subds. (c)-(d), 459.)

On July 25, 2007, pursuant to provisions of the federal Act, Global filed a petition in the United States District Court for the Central District of California seeking review of the CPUC’s opinion granting summary judgment for Cox and its opinion suspending Global’s certificate of public convenience and necessity. Global named the CPUC, rather than Cox, as the responding party. On August 28, 2007, the federal district court denied Global’s motion for preliminary injunctive relief. On December 23, 2008, the district court issued an amended order deeming the CPUC’s motion for judgment on the pleadings a motion summary judgment and upholding the CPUC’s decisions. The district court rejected Global’s arguments that the CPUC was preempted from taking action that effectively sets rates for VoIP traffic and its interpretation of the ICA was arbitrary or capricious. Global appealed from the district court judgment to the Ninth Circuit Court of Appeals, and that appeal remains pending.

We also take judicial notice of the pleadings filed in the United States District Court, Central District of California, in case No. CV 07-04801 MMM (SSx), and in the Ninth Circuit in case No. 09-55600. (Evid. Code, §§ 452, subds. (c)-(d), 459.)

In the meantime, on April 23, 2007, even before the CPUC issued its decision on Cox’s motion to enforce payment and for sanctions, Cox filed a petition in the state superior court to “confirm” the CPUC’s opinion granting summary judgment in its favor as an “arbitration award” pursuant to Code of Civil Procedure section 1285 et seq. After numerous continuances, the trial court heard the matter on June 12, 2008, and took it under submission without indicating which way it would rule. On August 13, 2008, the trial court issued an order granting Cox’s petition, ruling the CPUC had “conducted an arbitration pursuant to the agreement between the parties” and that “as a result of their participation, the parties are estopped from denying the nature of the proceeding to frustrate or render meaningless the award.” Judgment was entered on December 10, 2008, and this timely appeal followed.

III. Discussion

A. Standard of Review

Our review of a trial court’s decision confirming an arbitration award is de novo. (Roehl v. Ritchie (2007) 147 Cal.App.4th 338, 347, 349.) We likewise review questions of statutory and contractual construction and subject matter jurisdiction de novo. (People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 432; Dial 800 v. Fesbinder (2004) 118 Cal.App.4th 32, 42.)

B. Regulatory Background

In Core Communications, Inc. v. Verizon Pennsylvania, Inc. (3d Cir. 2007) 493 F.3d 333, 335-336 (Core Communications), the Third Circuit summarized the pertinent regulatory background: The Act, “was enacted ‘to promote competition and reduce regulation in order to secure lower prices and higher quality service for American telecommunications consumers and encourage the rapid deployment of new telecommunications technologies.’ (Preamble, Telecommunications Act of 1996, Pub.L. No. 104-404, 110 Stat. 56 (1996).) ‘As the legislative history explains, the Act creates “a pro-competitive, de-regulatory national policy framework designed to accelerate rapidly private sector deployment of advanced telecommunications and information technologies and services to all Americans by opening all telecommunications markets to competition.” ’ (Puerto Rico Tele. v. Telecommunications. Reg. Bd. [(1st Cir.1999)] 189 F.3d 1, 7-8..., quoting H.R. Conf. Rep. No. 104-458, at 113 (1996)....)

“[¶]... The ‘intended effect’ of such a regime was to ‘leav[e] state commissions free, where warranted, to reflect the policy choices made by their states.’ [Citation.]

“There are two sections of the Act that are at issue in this case: [sections] 251 and 252. Section 251 requires companies that traditionally provide local phone service—known as incumbent local exchange carriers (‘ILECs’)—to interconnect their networks with the networks of competitors—known as competing local exchange carriers (‘CLECs’). (47 U.S.C. § 251(c)(2).) Specifically, the Act charges ILECs with:

“The duty to provide, for the facilities and equipment of any requesting telecommunications carrier, interconnection with the local exchange carrier’s network

“(A) for the transmission and routing of telephone exchange service and exchange access; “(B) at any technically feasible point within the carrier’s network;

“(C) that is at least equal in quality to that provided by the local exchange carrier to itself or to any subsidiary, affiliate, or any other party to which the carrier provides interconnection; and

“(D) on rates, terms, and conditions that are just, reasonable, and nondiscriminatory, in accordance with the terms and conditions of the agreement and the requirements of this section and section 252 of this title. [(47 U.S.C. § 251(c)(2).)]

“... It also requires ILECs to lease portions of their existing networks to their competitors and to permit the ‘physical collocation of [CLEC] equipment necessary for interconnection or access to unbundled network elements’ at the ILEC’s premises. (Id. § 251(c)(3), (6).) Without these requirements, new entrants could not afford to build the large and expensive communications grids that incumbents have developed through years in the market.

“To implement these new duties, the Act relies on a system of private negotiations, followed by arbitration, if necessary, both under the supervision of state commissions. All of these steps to attain an [ICA] may be followed by federal court review, if it is sought by the parties. The process commences when an ILEC receives a ‘request for interconnection’ from another telecommunications company. [(47 U.S.C. § 252(a)(1).)] The Act then requires the ILEC to ‘negotiate in good faith in accordance with section 252... the particular terms and conditions of agreements to fulfill’ its substantive duties under the Act. (Id. § 252(c)(1).) A requesting carrier may also choose to adopt all of the terms and conditions of an existing state commission-approved agreement that the incumbent has with another carrier. (Id. § 252(i).)

“To deal with problems that may arise during the negotiation period, the Act provides that, if the parties are unable to agree, either party may petition the state commission to arbitrate ‘open issues.’ [(47 U.S.C. § 252(b)(1).)] As a final procedural safeguard, all [ICA] must be submitted to the state commission for approval. (Id. § 252(e)(1).) The commission’s ‘determinations’ with respect to the agreements are subject to review in federal court. (Id. § 252(e)(6).)” (Core Communications, supra, 493 F.3d at pp. 335-336.)

The Third Circuit went on to explain that, while sections 251 and 252 of the Telecommunications Act discuss state commissions’ role in the formation of ICAs, the Act “is simply silent as to the procedure for post-formation disputes.” (Core Communications, supra, 493 F.3dat p. 340.) Indeed, the Third Circuit further observed “ ‘[i]t would be gross understatement to say that the [Telecommunications] Act is not a model of clarity. It is in many important respects a model of ambiguity or indeed even self-contradiction.’ ” (Id. at p. 345, quoting AT&T Corp. v. Iowa Utils. Bd. (1999) 525 U.S. 366, 397.)

“Faced with a gap in the relevant statutory scheme,” the Third Circuit, as have other federal courts, looked to the FCC. (Core Communications, supra, 493 F.3dat p. 341.) In In re Starpower Communications, LLC (2000) 15 F.C.C.R. 11277, the FCC recognized the authority of a state commission to adjudicate a postformation ICA dispute. Accordingly, “every federal appellate court to consider the issue has determined or assumed that state commissions have the authority to hear interpretation and enforcement actions regarding approved [ICAs], despite the Act’s silence on that point.” (Core Communications, supra, at p. 342, fn. 7.)

Not only do state commissions have authority to hear and resolve postformation ICA disputes, but parties usually must avail themselves of that forum before filing any action in the federal courts. As the Third Circuit further explained, “[i]n the context of the Telecommunications Act, we believe that a ‘symmetrical and coherent regulatory scheme’ is one where the bodies that considered formation problems also resolve interpretation difficulties. As with formation problems, federal court jurisdiction over state commission interpretation and enforcement decisions should be limited to appellate review.” (Core Communications, supra, 493 F.3d. at pp. 342-343.) Thus, “[p]ursuant to the FCC’s guidance... interpretation and enforcement actions that arise after a state commission has approved an interconnection agreement must be litigated in the first instance before the relevant state commission. A party may then proceed to federal court to seek review of the commission’s decision or move on to the appropriate trial court to seek damages for a breach, if the commission finds one.” (Id. at p. 344)

C. The Nature of the Proceeding Before the CPUC

With this federal regulatory scheme in mind, we turn to the issue here—the nature of the proceedings before the CPUC. Cox asserts the CPUC “arbitrated” the parties’ postformation ICA dispute and therefore the CPUC’s opinion is an “arbitration award” subjection to “confirmation” in the superior court pursuant to Code of Civil Procedure section 1285 et seq. As support for this claim, Cox points to the ALJ’s use of the word “arbitration,” which was repeated in the CPUC’s opinion, and to a provision in the parties’ ICA providing for arbitration of disputes upon “mutual agreement.” Specifically, Cox argues “Global consented to have the ALJ arbitrate any disputes” between the parties “[b]y agreeing to Section 24.9” of the ICA.

Code of Civil Procedure section 1285 provides: “Any party to an arbitration in which an award has been made may petition the court to confirm, correct or vacate the award. The petition shall name as respondents all parties to the arbitration and may name as respondents any other persons bound by the arbitration award.”

Section 24.9 of the ICA provides: “Any dispute between the Parties regarding the interpretation or enforcement of this Agreement or any of its terms shall be addressed by good faith negotiation between the Parties, in the first instance. Should such negotiations fail to resolve the dispute in a reasonable time, the Parties may, upon mutual agreement, submit the matter to alternative dispute resolution (‘ADR’) or, in the absence of such an agreement, either Party may initiate an appropriate action in any regulatory or judicial forum of competent jurisdiction.” By its plain terms, this section provides for ADR or an “appropriate action in any regulatory or judicial forum.”

“Rules of construction allow the disjunctive ‘or’ be accorded its ordinary meaning so as to reconcile potential conflicts and give effect to each provision separated by the disjunctive.” (Kelly v. William Morrow & Co. (1987) 186 Cal.App.3d 1625, 1630.) The use of the word “or” in a contract phrase “marks an alternative such as ‘either this or that.’ ” (Ibid.) The word “or” indicates an intention “to designate alternative or separate categories.” (St. Cyr v. Workers’ Comp. Appeals Bd. (1987) 196 Cal.App.3d 468, 472.)

Thus, contrary to Cox’s argument, Global’s agreement to section 24.9 was not an agreement “to arbitrate” before the ALJ or any other decision maker. Rather, by agreeing to section 24.9, Global (a) committed itself to making a good faith effort to informally resolve any dispute, (b) secured the option of proceeding with ADR, including arbitration, if it agreed to do so and (c) if it refused to agree to ADR, bound itself to proceed with or defend against an appropriate action in a regulatory or judicial forum of competent jurisdiction. In connection with the instant dispute, Global did agree to mediate, but it did not agree to arbitrate.

We note that had Cox believed the ICA mandated arbitration of the dispute, rather than making it an option upon the consent of both parties, it had a statutory remedy: it could have filed a petition to compel arbitration. (Code Civ. Proc., §§ 1281, 1281.2.)

Cox nevertheless argues the “appropriate action” it pursued here was “to arbitrate before the [Public Utility] Commission’s ALJ.” In other words, under Cox’s construction, Global had the right to not agree to ADR, including arbitration, on the one hand, but could be forced to arbitrate in a regulatory or judicial forum, on the other. This is a “heads I win, tails you lose” proposition that effectively reads Global’s right to not agree to ADR out of the ICA. We will not engage in a construction that renders meaningless, or effectively eliminates, provisions to which the parties agreed. (See City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1998) 68 Cal.App.4th 445, 473 [“Courts must interpret contractual language in a manner which gives force and effect to every provision, and not in a way which renders some clauses nugatory, inoperative or meaningless.”].)

Cox’s action before the CPUC was a quintessential adjudicatory administrative proceeding, not an arbitration. Cox commenced the proceeding by filing a “complaint” which alleged, in part, “This complaint is filed by Cox... against Global... for the recovery of unpaid amounts due under an [ICA] between the two companies. These amounts are due to Cox as a result of Global[’s] breach of the [ICA]. [¶]... [¶] Based upon Global’[s] breach... Cox requests that the Commission enter an order enforcing the terms of the [ICA].” Cox further alleged: “Section 24.8 of the [ICA] contains the parties’ agreement on how to resolve billing disputes. In particular, Section 24.8.4 requires the parties to engage in informal dispute resolution efforts. Cox has attempted, through discussions with representatives of Global,... to resolve the issues presented in this complaint. In addition, Cox and Global... participated in a mediation effort with the staff of the [FCC]. None of these efforts were successful at resolving the dispute. [¶] The [ICA] contains specific language consenting to the jurisdiction of [the CPUC] for the resolution of disputes. Specifically, Section 24.8.5 provides in relevant terms as follows: [¶] If the parties are unable to resolve issues related to the Disputed Amounts..., then either Party may file a complaint with the Commission to resolve such issues.... The Commission may direct release of any or all funds (including any accrued interest) in the escrow account, plus applicable late fees, to be paid to either Party. [¶]... Thus, this complaint is properly brought for the collection of lawful tariff charges pursuant to Public Utilities Code [sections] 735 and 737.” Nowhere in Cox’s complaint did it seek “arbitration” of its claims against Global.

Every other filing and action in the proceeding further underscored that it was an adjudicatory administrative proceeding, not an arbitration. For example, Global responded with an answer and a motion to dismiss or to stay. Cox subsequently filed a motion for summary judgment. The CPUC ultimately issued an “opinion” based on “findings of fact” and “conclusions of law.” Global sought rehearing. Cox, in turn, moved for an order requiring Global to comply with the opinion and for sanctions.

All of this, moreover, was done in accordance with the procedures for “Hearings and Judicial Review” set forth in chapter 9 of the Public Utilities Act (Pub. Util. Code, § 1701 et seq.) and the implementing “Rules of Practice and Procedure” in chapter 1 of title 20 of the California Code of Regulations (Cal. Code Regs., tit. 20, § 1 et seq.). None of these statutory provisions and rules state, or even suggest, that a CPUC adjudicatory proceeding is an “arbitration” that results in an “award” subject to “confirm[ation], correct[ion] or vacat[ion]” pursuant to Code of Civil Procedure section 1285 et seq.

On the contrary, the Public Utilities Act provides its own enforcement scheme. The CPUC is empowered to impose sanctions for failure to comply “with any part or provision of an order, decision, decree, rule, direction, demand, or requirement.” (Pub. Util. Code, § 2107 .) Such failure also can be punished as a crime. (Pub. Util. Code, § 2112 .) The Act further authorizes the attorney of the CPUC to secure compliance with any “order, decision, rule, direction, or requirement” by filing a mandamus proceeding or action for injunctive relief in the superior court. (Pub. Util. Code, § 2102 .)

The Public Utilities Act also provides its own scheme for judicial review. An aggrieved party can file an application with the CPUC for rehearing or for modification. (Pub. Util. Code, § 1731; Cal. Code Regs., tit. 20, § 16.1 .) Thereafter, an aggrieved party can seek judicial review by way of a writ of review to the Court of Appeal or Supreme Court. (Pub. Util. Code, § 1756.) And perhaps most significantly, when, as here, a CPUC proceeding involves a postformation ICA dispute, an aggrieved party can seek judicial review in the federal district court. (Core Communications, supra, 493 F.3d at pp. 342-344.)

Cox’s assertion that it could seek confirmation of the CPUC’s opinion as an “arbitration award” pursuant to Code of Civil Procedure section 1285 et seq. cannot be squared with this panoply of specific statutory provisions for enforcement and judicial review of CPUC decisions. For example, it makes no sense that a CPUC decision in a postformation ICA dispute could, at the same time, be subject to judicial review in a federal district court and subject to confirmation proceedings as an “arbitration award” in a state superior court. The problems inherent in such concurrent judicial proceedings are manifest and further exacerbated by the disparity in the scope of judicial review. There are severe limitations on the scope of judicial review, for example, in a proceeding to confirm an arbitration award. (Code Civ. Proc., § 1286 .) It is no surprise, then, that Cox has not cited a single case which so much as suggests a CPUC opinion is an “arbitration award” which is subject to “confirm[ation], correct[ion] or vacat[ion]” under Code of Civil Procedure section 1285 et seq.

Cox points to the fact the ALJ used the term “arbitration” in the order denying Global’s motion to stay or dismiss. The ALJ observed: “If the Commission has jurisdiction to arbitrate this dispute, it appears to be a straightforward case of contract interpretation.... [T]his is precisely the sort of question that the FCC has empowered state commissions to resolve via arbitration proceedings.” The CPUC’s opinion granting summary judgment repeats the ALJ’s language that, “[f]ederal law does not pre-empt the Commission from arbitrating this dispute.”

That the ALJ used the term “arbitration” is understandable given the less than clear federal statutory scheme and the fact the federal statutes expressly refer to “arbitration” in connection with ICAs. However, as the federal cases make clear, those statutory provisions deal with the unique process of forming ICAs and do not address postformation disputes. The latter must be resolved as provided for in the parties’ ICA and, if litigated, litigated before the applicable state commission in the first instance. Thus, the parties to an ICA could agree to include a mandatory arbitration provision. (See McNeal v. Idaho Public Utilities Commission (2006) 142 Idaho 685 [state commission properly dismissed administrative complaint in light of mandatory arbitration provision in parties’ ICA]). However, Cox and Global did not include such a provision, but rather provided for ADR only if both parties agreed, which they did not. Cox therefore was required to institute a proceeding before the CPUC, which by statute and rule was an administrative adjudicatory proceeding, not an “arbitration” producing an “award” subject to “confirm[ation], correct[ion] or vacat[ion]” pursuant to Code of Civil Procedure section 1285 et seq.

In Mercury Ins. Group v. Superior Court (1998) 19 Cal.4th 332, the Supreme Court described the unique characteristics of contractual arbitration. These include the parties’ agreement to arbitrate, the arbitrator’s power to decide a dispute contrary to law, and the finality of the arbitrator’s decision. (Id. at pp. 344-345.) “Because the decision to arbitrate grievances evinces the parties’ intent to bypass the judicial system and thus avoid potential delays at the trial and appellate levels, arbitral finality is a core component of the parties’ agreement to submit to arbitration. Thus, an arbitration decision is final and conclusive because the parties have agreed that it be so.... [¶]... ‘As a consequence, arbitration awards are generally immune from judicial review. “Parties who stipulate in an agreement that controversies that may arise out of it shall be settled by arbitration, may expect not only to reap the advantages that flow from the use of that nontechnical, summary procedure, but also to find themselves bound by an award reached by paths neither marked nor traceable and not subject to judicial review.” ’ ” (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 10-11, fn. omitted, quoting Case v. Alperson (1960) 181 Cal.App.2d 757, 759, abrogated on another ground in Posner v. Grunwald-Marx, Inc. (1961) 56 Cal.2d 169, 183.)

Here, both parties did not agree to “arbitration,” no arbitrator had the power to decide a dispute contrary to the law, and the CPUC’s opinion was not beyond substantive judicial review. In sum, the action Cox instituted before the CPUC neither sought arbitration nor possessed any of the indicia of contractual arbitration. It was an adjudicatory, administrative proceeding with specified schemes for enforcement and judicial review.

IV. Disposition

The judgment is reversed, and the case remanded to the trial court with directions to dismiss the action with prejudice.

We concur: Marchiano, P. J., Dondero, J.


Summaries of

Cox California Telecom, LLC v. Global NAPs California, Inc.

California Court of Appeals, First District, First Division
Oct 14, 2009
No. A124213 (Cal. Ct. App. Oct. 14, 2009)
Case details for

Cox California Telecom, LLC v. Global NAPs California, Inc.

Case Details

Full title:COX CALIFORNIA TELECOM, LLC, Plaintiff and Respondent, v. GLOBAL NAPs…

Court:California Court of Appeals, First District, First Division

Date published: Oct 14, 2009

Citations

No. A124213 (Cal. Ct. App. Oct. 14, 2009)