Speier v. The Advantage Fund, LLC

Filed 4/19/21

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

STEVEN M. SPEIER,

Plaintiff, Cross-defendant and G059216
Appellant,
(Super. Ct. No. 30-2017-00956650)
v.
OPINION
THE ADVANTAGE FUND, LLC, et al.,

Defendants, Cross-complainants and
Respondents.

Appeal from a judgment of the Superior Court of Orange County, James
Di Cesare, Judge. Affirmed.
Law Office of William B. Hanley and William B. Hanley for Plaintiff,
Cross-defendant and Appellant.
O’Melveny & Myers, Michael G. Yoder and Brandon C. Amash for
Defendants, Cross-complainants and Respondents.
* * *
 INTRODUCTION
Exercising de novo review, we affirm the trial court’s judgment entered
after the trial court granted a motion to confirm an arbitration award and denied a motion
to vacate that award. The applicable statute states that an award can only be vacated for a
failure to disclose if the arbitrator “failed to disclose . . . a ground for disqualification.”
1
(Code Civ. Proc., § 1286.2, subd. (a)(6)(A).) Appellant contends the arbitrator failed to
make required disclosures. Appellant does not contend the arbitrator was actually biased.
The sole basis for the appeal is the argument the arbitrator did not disclose information
that could cause a reasonable person aware of the facts to entertain a doubt that the
arbitrator would be able to be impartial.
The arbitration involved claims by a former investment fund manager and
his former employers, namely, the investment funds. All parties were sophisticated and
engaged in a business—not consumer—dispute. Both the fund manager and the
investment funds were represented by large law firms—Alston & Bird for the fund
manager and O’Melveny & Myers for the investment funds. Both law firms were
frequent users of the services of the ADR provider, JAMS; they each had 245 matters
before JAMS in the five-year period preceding this arbitration.
We explain in detail in this opinion how the arbitrator and JAMS made
extensive prearbitration disclosures. The motion to vacate was based on the sole ground
that the arbitrator did not disclose the extent of JAMS’s “business relationship” with
O’Melveny & Myers and the arbitrator’s ownership interest in JAMS (not more than
.1 percent of total revenue in a given year).
Based on the facts and circumstances shown by this record, and applying
the analytical framework we discuss, we hold that the arbitrator’s and JAMS’s
disclosures were sufficient, and the arbitrator was not required to disclose more
1
All further statutory references are to the Code of Civil Procedure unless otherwise
specified.

2
information about the extent of JAMS’s business with O’Melveny & Myers, or the
arbitrator’s own ownership interest in JAMS. There is no issue of a repeat party or
lawyer being favored over a non-repeat party or lawyer; the parties in this business
dispute are sophisticated; and the law firms were both frequent users of JAMS to the
same extent.
* * *
Before addressing the merits in detail, we will make some observations of
the big picture to give context to our decision.
First and foremost, the issues of disqualification and disclosure are vitally
important to the integrity of decisions and the decision-making process. (See Rothman,
Fybel, MacLaren & Jacobson, Cal. Jud. Conduct Handbook (4th ed. 2017) § 7:1, p. 387.)
Second, the extent to which a disclosure is required is considered under an
objective standard depending on the facts of each case. Hence, the test focuses on a
reasonable person aware of the facts. As a result, there is no bright-line rule and, in
another case, the type of disclosures we conclude were not required here may be required,
depending on the facts of that case.
Third, disclosures are required where a reasonable, informed person could
entertain a doubt about the impartiality of the arbitrator. Significantly, “[a]ll the possible
things that might be of interest to litigants and lawyers are not things which would be
considered, in reason,” to be relevant to the question of disqualification. (Rothman et al.,
Cal. Jud. Conduct Handbook, supra, § 7:74, p. 496.) The statutes and ethical standards
governing arbitrator disqualification upon which this appeal is based do not require the
disclosure of information other than that which could cause a person aware of all the facts
to reasonably question the prospective arbitrator’s impartiality. None of the relevant
statutes and ethical standards provides that an arbitrator would be disqualified for failing
to disclose information outside of the reasonable person standard.

3
 Fourth, under the relevant terms of the statute governing vacation of
arbitration awards, the award could only be vacated and not confirmed if the arbitrator
“failed to disclose . . . a ground for disqualification.” (§ 1286.2, subd. (a)(6)(A).) Under
the governing statutes and ethical standards, required disclosures are limited to matters
reasonably related to disqualification. (See Rothman et al., Cal. Jud. Conduct Handbook,
supra, § 7:17, p. 414, citing Code Civ. Proc., §§ 170.1-170.5 & Cal. Code Jud. Ethics,
canon 3E(2)(a).) Here, that ground of disqualification is whether the arbitrator was
required to disclose additional facts that could or might cause a person aware of the facts
to reasonably entertain a doubt the arbitrator could not be impartial.
Fifth, and finally, simply because a matter may not seem to be required to
be disclosed by an arbitrator does not mean the arbitrator should not disclose the matter.
Indeed, disclosure may cause a meaningful discussion to better inform the arbitrator on
the question of disqualification. (Rothman et al., Cal. Jud. Conduct Handbook, supra,
§ 7:73, p. 495.)

2
FACTUAL AND PROCEDURAL BACKGROUND
I.
THE FUNDS AND THEIR INVESTMENT MANAGERS
The Advantage Fund, LLC, the Discovery Fund, LLC, the Freedom Fund,
LLC, and the Victory Fund, LLC (collectively, the Funds) invested in portfolios of
commercial office buildings. Entities formed by David Colton (the Colton entities)
served as the original fund manager for the Funds. After many years, the Funds’
shareholders and investors became dissatisfied with the Funds’ performance and filed
lawsuits against the Colton entities. In 2013, certain of the asserted claims were

2
The facts summarized in this section are taken from the final arbitration award and the
parties’ counsel’s declarations filed in connection with their respective motions to
confirm and vacate the award.

4
submitted to arbitration. During the pendency of that arbitration, in March 2015, the
Funds’ shareholders elected Steven M. Speier as the new fund manager.
About two years later, and in accordance with a settlement agreement
between the Colton entities and shareholders of the Funds, the shareholders agreed to
cooperate in removing Speier as fund manager and restoring the Colton entities to that
role for the Funds. Speier received written notice of his removal for cause.
In July 2017, Speier sent the Funds a letter alleging he was entitled to
shareholder distribution payments and backend interest payments in the Funds’ profits.
The Funds principally asserted that Speier had taken a shareholder distribution payment,
improperly appointed himself president of the Funds, and paid himself a salary for
performing the same duties as fund manager.
II.
INITIATION OF ARBITRATION BETWEEN SPEIER AND THE FUNDS
After the parties unsuccessfully attempted to agree on an arbitrator to
resolve their disputes, Speier filed a petition in the trial court to compel arbitration and
for an order appointing an arbitrator. The trial court granted the petition and nominated
five retired judges from the list of potential arbitrators submitted by the parties to serve as
arbitrator. The court ordered that either the parties agree to one of the five nominees, or
the court would select an arbitrator from that list. The parties failed to stipulate to an
arbitrator before the court’s deadline and the court thereafter appointed the Honorable
Gail A. Andler (Ret.) (the arbitrator) from that list to serve as the arbitrator. Later that
month, Speier filed his demand for arbitration with JAMS, asserting claims against the

5
Funds for breach of operating agreements, breach of the implied covenant of good faith
and fair dealing, declaratory relief, and an accounting.
III.
PREARBITRATION DISCLOSURES
JAMS and the arbitrator provided the parties with disclosures under
(1) sections 170.1, 1281.6, 1281.85, 1281.9, 1281.95, and 1297.121, (2) the California
Rules of Court Ethics Standards for Neutral Arbitrators in Contractual Arbitration (the
Ethics Standards), and (3) JAMS Ethical Guidelines for Arbitrators. As relevant to the
issues on appeal, the disclosures included the arbitrator’s statement: “I practice in
association with JAMS. Each JAMS neutral, including me, has an economic interest in
the overall financial success of JAMS. In addition, because of the nature and size of
JAMS, the parties should assume that one or more of the other neutrals who practice with
JAMS has participated in an arbitration, mediation or other dispute resolution proceeding
with the parties, counsel or insurers in this case and may do so in the future.”
The arbitrator further disclosed that, within the preceding five years, she
had served as a neutral arbitrator in other matters involving a party, a lawyer for a party,
or law firm for a party to the current arbitration. JAMS provided the parties with reports
showing matters involving the arbitrator and Speier, Speier’s arbitration counsel (Alston
& Bird), the Funds, and the Funds’ arbitration counsel (O’Melveny & Myers). Those
reports showed the arbitrator had a then-open mediation involving attorneys from Alston
& Bird who were not involved in the instant arbitration, one then-open mediation
involving two attorneys from O’Melveny & Myers who were also serving as the Funds’
counsel in the instant arbitration, and one then-open arbitration involving attorneys from
O’Melveny & Myers who were not involved in the instant arbitration. No party filed any
objection to the arbitrator’s assignment.

6
 IV.
THE ARBITRATION
The Funds filed a response to Speier’s statement of claims and asserted
their counterclaims against Speier for declaratory relief, breach of contract, breach of the
implied covenant of good faith and fair dealing, breach of fiduciary duty, corporate
waste, and unjust enrichment.
Following nine days of an arbitration hearing, in June 2019, the arbitrator
issued an interim award which denied Speier relief on his claims and awarded the Funds
damages in the amount of $353,183.93 plus prejudgment interest. The arbitrator also
found the Funds to be the prevailing parties and invited the Funds to submit an
application for attorney fees and costs. Speier did not object to the interim award. The
Funds submitted an application for attorney fees and costs, Speier opposed the
application, and the Funds replied. Speier thereafter retained new counsel, William B.
Hanley, and requested the opportunity to submit a supplemental opposition; the arbitrator
granted the request.
In August 2019, the arbitrator issued the final arbitration award which
stated the Funds had established their counterclaims and were entitled to a principal
award (which included prejudgment interest) in the amount of $433,117.23, plus an
award of $2,112,974.03 for attorney fees and $157,709.87 in costs.
V.
MOTIONS TO CONFIRM AND VACATE THE AWARD
In November 2019, the Funds filed a motion in the trial court seeking an
order confirming the final arbitration award and entry of final judgment. Hanley sent a
letter to JAMS requesting for the first time “information relating to the following:
(1) ownership interest of [the arbitrator] in JAMS and (2) the number of arbitrations
JAMS has had with O’Melveny & Myers in the past five (5) years.”

7
 In response, JAMS sent Hanley a letter stating the arbitrator is “an owner
panelist of JAMS” and added that “[o]wners are not privy to information regarding the
number of cases or revenue related to cases assigned to other panelists. Shareholders
receive no information regarding any potential impact on distributions by any particular
client, lawyer, or law firm. Shareholders do not receive credit for the creation or
retention of client relationships.”
As to Hanley’s second request, JAMS’s response letter stated: “We have
not limited our response to the O’Melveny firm. Instead, we enclose a report that
provides JAMS usage history for all of the firms, lawyers, and parties in this matter for
the five years prior to commencement of this arbitration.” The enclosed report showed,
as reported by the trial court in its minute order confirming the award, that in the
preceding five years, JAMS administered 58 arbitrations, 27 references, and 160
mediations, for a total of 245 matters, involving O’Melveny & Myers, and 36
arbitrations, 18 court references, and 191 mediations, for a total of 245 matters, involving
Alston & Bird; no party objected in the trial court or challenges on appeal the court’s
summary of the report.
The report also stated: “JAMS administers approximately 13,000 cases per
year,” defined as any case in which JAMS receives a payment, regardless of which party
or parties paid. The report further stated: “JAMS has approximately 400 neutrals on its
panel, and a little over one quarter of JAMS neutrals have an equal ownership share in
the company. Owners are not privy to information regarding the number of cases or
revenue related to cases assigned to other panelists. No shareholder’s distribution has
ever exceeded 0.1% of JAMS total revenue in a given year. Shareholders are not
informed about how their profit distributions are impacted by any particular client,
lawyer or law firm and shareholders do not receive credit for the creation or retention of
client relationships.”

8
 Speier filed an opposition to the motion to confirm the final award and a
motion to vacate the final award that were both based solely on the ground the arbitrator
failed to make material disclosures required by sections 1286.2, subdivision (a)(6)(A),
1281, 170.1, and the Ethics Standards by failing to disclose her ownership in JAMS and
the amount of business JAMS has conducted with O’Melveny & Myers.
Following a hearing, the trial court denied the motion to vacate and
confirmed the final arbitration award. Judgment was entered in favor of the Funds and
against Speier in conformity with the final award in the amount of $433,117.23, plus
attorney fees in the amount of $2,112,974.03, and costs in the amount of $157,709.87.
Speier appealed.

DISCUSSION
I.
OVERVIEW OF AN ARBITRATOR’S DUTY TO DISCLOSE MATTERS THAT COULD OR
MIGHT CAUSE A PERSON AWARE OF THE FACTS TO REASONABLY ENTERTAIN A
DOUBT THAT THE ARBITRATOR WOULD BE ABLE TO BE IMPARTIAL.
A.
The California Arbitration Act
“The California Arbitration Act (§ 1280 et seq.) ‘represents a
comprehensive statutory scheme regulating private arbitration in this state.’ [Citation.]
The statutory scheme reflects a ‘strong public policy in favor of arbitration as a speedy
and relatively inexpensive means of dispute resolution.’ [Citation.] ‘[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.’” (Haworth v. Superior Court (2010) 50 Cal.4th 372, 380
(Haworth).)
Because a court may not generally review the merits of an arbitration
award, parties to an arbitration agreement assume some risk of an erroneous decision by
the arbitrator. (Haworth, supra, 50 Cal.4th at p. 380.) The Legislature has reduced that

9
risk by providing for judicial review when there are “‘serious problems with the award
itself, or with the fairness of the arbitration process.’” (Ibid.) The grounds for judicially
vacating an arbitration award, however, are strictly limited by statute. As relevant to this
case, section 1286.2, subdivision (a)(6)(A) requires the trial court to vacate an arbitration
award by an arbitrator who “failed to disclose within the time required for disclosure a
ground for disqualification of which the arbitrator was then aware.”
Section 1281.9, subdivision (a) requires arbitrators 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.” (Italics added.) Section
1281.9 provides a list of matters to be disclosed which includes the “existence of any
ground specified in Section 170.1 for disqualification of a judge” (id., subd. (a)(1)),
“matters required to be disclosed by the ethics standards for neutral arbitrators adopted by
the Judicial Council” (id., subd. (a)(2)), and “the names of the parties to all prior or
pending noncollective bargaining cases in which the proposed neutral arbitrator served
or is serving as a party arbitrator for any party to the arbitration proceeding or for a
lawyer for a party and the results of each case arbitrated to conclusion, including the date
of the arbitration award, identification of the prevailing party, the names of the parties’
attorneys and the amount of monetary damages awarded, if any” (id., subd. (a)(3), italics
added).
Section 170.1, subdivision (a)(6)(A)(iii) mandates disqualification of a
judge when a “person aware of the facts might reasonably entertain a doubt that the judge
would be able to be impartial.” Standard 7(d) of the Ethics Standards requires arbitrators
to disclose, among other things, “all matters that could cause a person aware of the facts
to reasonably entertain a doubt that the arbitrator would be able to be impartial,
including, but not limited to,” as cited by Speier in his opening brief, “(15) Any other
matter that: [¶] (A) Might cause a person aware of the facts to reasonably entertain a
doubt that the arbitrator would be able to be impartial.” (Ethics Standards, std.

10
7(d)(15)(A), italics added.) In his opening brief, Speier also cites standard 9, which
states: “A person who is nominated or appointed as an arbitrator must make a reasonable
effort to inform himself or herself of matters that must be disclosed under standards 7 and
8.” (Id., std. 9(a).)
B.
The Objective, Reasonable Person Standard
“‘The “reasonable person” is not someone who is “hypersensitive or unduly
suspicious,” but rather is a “well-informed, thoughtful observer.”’ [Citations.] ‘[T]he
partisan litigant emotionally involved in the controversy underlying the lawsuit is not the
disinterested objective observer whose doubts concerning the judge’s impartiality
provide the governing standard.’ [Citations.] [¶] ‘An impression of possible bias in the
arbitration context means that one could reasonably form a belief that an arbitrator was
biased for or against a party for a particular reason.’” (Haworth, supra, 50 Cal.4th at
3
p. 389.)
The reasonable person standard is objective: “Courts apply an objective
test in determining whether under section 1281.9, subdivision (a) neutral arbitrators must
disclose matters that could reasonably cause a person aware of the facts to entertain a
doubt that the proposed arbitrator would be impartial. [Citation.] The ‘objective
test . . . focuses on a reasonable person’s perception of bias and does not require actual
bias.’ [Citation.] Accordingly, we are not concerned with the subjective question of
whether the arbitrator was actually biased, but whether an objective, reasonable person
aware of the facts reasonably could entertain a doubt that he could be impartial in the

3
The California Supreme Court noted: “In interpreting a comparable provision of the
federal law requiring recusal of a judge when his or her ‘impartiality might reasonably be
questioned’ [citation], federal courts have stated that the appearance-of-partiality
‘standard “must not be so broadly construed that it becomes, in effect, presumptive, so
that recusal is mandated upon the merest unsubstantiated suggestion of personal bias or
prejudice.”’” (Haworth, supra, 50 Cal.5th at p. 389.)

11
case.” (Malek Media Group, LLC v. AXQG Corp. (2020) 58 Cal.App.5th 817, 828, citing
Haworth, supra, 50 Cal.4th at pp. 385-386.)
II.
STANDARD OF REVIEW
Here, the facts are not in dispute. The Supreme Court in Haworth, supra,
50 Cal.4th at page 385, under similar circumstances, stated that whether the arbitrator
was required to make certain disclosures is “a mixed question of fact and law that should
be reviewed de novo.” The Supreme Court explained: “We conclude that employment
of a de novo standard of review for issues concerning arbitrator disclosure will assist in
ensuring both consistency in the law and finality of arbitration awards, without
sacrificing accuracy in those determinations.” (Id. at p. 388.)
III.
UNDER THE CIRCUMSTANCES OF THIS CASE, NEITHER THE ARBITRATOR’S
OWNERSHIP INTEREST IN JAMS NOR THE EXTENT OF JAMS’S BUSINESS WITH
O’MELVENY & MYERS COULD OR MIGHT CAUSE A REASONABLE PERSON AWARE OF
THE FACTS TO ENTERTAIN A DOUBT THAT THE ARBITRATOR WOULD BE ABLE TO BE
IMPARTIAL.
Speier’s challenge to the final arbitration award is not based on either the
contention the arbitrator failed to disclose any information specifically required to be
disclosed by the Code of Civil Procedure or Ethics Standards, or the contention the
arbitrator was in fact biased. Instead, Speier’s challenge is limited to the argument the
award must be vacated because the arbitrator failed to disclose information that raises a
doubt about the arbitrator’s impartiality within the meaning of sections 170.1, subdivision
(a)(6)(A)(iii) and 1281.9, subdivision (a), and standard 7 of the Ethics Standards. Speier
relies solely on his contention the arbitrator’s ownership interest in JAMS and JAMS’s

12
prior business relationship with O’Melveny & Myers was required to have been disclosed
under this category.
It is undisputed that the arbitrator offered a complete disclosure of her
current and prior dealings with the parties, the parties’ attorneys, and the parties’
attorneys’ law firms in this case.
If this were a consumer case, which all parties agree it was not, standard 8
of the Ethics Standards would apply to require the type of disclosures Speier argues
should have been made here. Standard 8, entitled “Additional disclosures in consumer
arbitrations administered by a provider organization,” requires at subpart (b) that in a
4
consumer arbitration, the arbitrator must disclose “[a]ny significant past, present, or
currently expected financial or professional relationship or affiliation between the
administering dispute resolution provider organization and a party or lawyer in the
arbitration.” In consumer arbitrations, standard 8(c) further requires the arbitrator also to

4
The term “Consumer arbitration” is defined in standard 2(d) as “an arbitration
conducted under a predispute arbitration provision contained in a contract that meets the
criteria listed in paragraphs (1) through (3) below . . . [¶] (1) The contract is with a
consumer party, as defined in these standards; [¶] (2) The contract was drafted by or on
behalf of the nonconsumer party; and [¶] (3) The consumer party was required to accept
the arbitration provision in the contract.” A “Consumer party,” in turn, is defined in
standard 2(e) as “a party to an arbitration agreement who, in the context of that arbitration
agreement, is any of the following:
“(1) An individual who seeks or acquires, including by lease, any goods or
services primarily for personal, family, or household purposes including, but not limited
to, financial services, insurance, and other goods and services as defined in section 1761
of the Civil Code;
“(2) An individual who is an enrollee, a subscriber, or insured in a health-care
service plan within the meaning of section 1345 of the Health and Safety Code or
health-care insurance plan within the meaning of section 106 of the Insurance Code;
“(3) An individual with a medical malpractice claim that is subject to the
arbitration agreement; or
“(4) An employee or an applicant for employment in a dispute arising out of or
relating to the employee’s employment or the applicant’s prospective employment that is
subject to the arbitration agreement.”

13
provide information regarding “[a]ny financial relationship or affiliation the arbitrator has
with the provider organization other than receiving referrals of cases, including whether
the arbitrator has a financial interest in the provider organization or is an employee of the
provider organization.”
Standard 8(a)(2) has this important proviso: “An arbitrator is not required
to make the disclosures required by this standard if he or she reasonably believes that the
arbitration is not a consumer arbitration based on reasonable reliance on a consumer
5
party’s representation that the arbitration is not a consumer arbitration.” (Italics added.)
Therefore, contrary to Speier’s argument that the arbitrator’s ownership interest in JAMS
and the extent of JAMS’s prior business matters with O’Melveny & Myers automatically
constitute information that must be disclosed by an arbitrator, standard 8(a)(2) makes
clear such information is not subject to mandatory disclosure in nonconsumer
arbitrations.
We next consider whether such disclosures were nevertheless required
because, under the specific facts and circumstances of this case, the information could
reasonably raise a doubt in a person aware of the facts about the arbitrator’s impartiality.
There are no facts or circumstances in our record, and Speier does not point to any, that
show how the arbitrator’s receipt a distribution of not more than .1 percent of JAMS’s
total revenue in a given year in any way favors one party or party’s law firm over the
other.

5
Speier tacitly admits in his opening brief that a disclosure of the extent of JAMS’s
business relationships with a law firm involved in an arbitration is not automatically
required in the nonconsumer context under California law. Speier argues: “It should be
incumbent on the dispute resolution provider organization who is coordinating,
administering, or providing arbitration services to disclose to all parties in writing any
significant past, present, or currently expected financial or professional relationship or
affiliation between the administering dispute organization provider not only with the
parties or the individual lawyer for the parties but also the law firms. Such a rule exits in
consumer arbitrations (Ethics Standards 8 (b) [&] (d); CCP § 1281.92). It should be part
of commercial arbitrations as well.” (Underlining omitted.)

14
 The parties’ arbitration attorneys are from law firms that had the same
number of matters before JAMS in the five years prior to the arbitrator’s assignment to
this case. Therefore, the information Speier contends should have been known and
disclosed by the arbitrator, whether considered independently or collectively as a whole,
does not reasonably raise a doubt about the arbitrator’s impartiality. As the arbitrator did
not fail to make a required disclosure, and Speier offers no other challenges to the
arbitration award, the trial court did not err by denying Speier’s motion to vacate,
confirming the final award, and entering judgment accordingly. (See Rivera v. Shivers
(2020) 54 Cal.App.5th 82, 89 [“Where a party files a petition to confirm an arbitration
award pursuant to section 1285 et seq., ‘the court shall confirm the award as made’ unless
it ‘vacates the award or dismisses the proceeding.’ (§ 1286.)”].)
At oral argument, Speier’s counsel focused on the words “might” and
“could” in the authorities. His argument, unfortunately, ignored three fundamental
principles that apply to the analysis. First, it reads out the legal express concepts of a
“person aware of the facts” and a “reasonable” person.
Second, Speier’s argument ignores the context of the statutes and ethics
standards upon which he relies, which provide for the disqualification of a prospective
arbitrator based on his or her failure to make a required disclosure under the code. (See
§ 1281.91, subd. (a) [“A proposed neutral arbitrator shall be disqualified if he or she fails
to comply with Section 1281.9”], italics added; § 1286.2, subd. (a)(6) [an arbitration
award shall be vacated if the arbitrator failed to “disclose . . . a ground for
disqualification” or the arbitrator “was subject to disqualification upon grounds specified
in Section 1281.91 but failed upon receipt of timely demand to disqualify himself or
herself as required by that provision”], italics added; Ethics Standards, std. 7(a) [“This
standard is intended to identify the matters that must be disclosed by a person nominated
or appointed as an arbitrator”], italics added.) These statutes and standards do not
provide for the disclosure of any additional information a party might find relevant to its

15
determination whether to select a particular arbitrator, much less the invalidation of an
arbitration award based on the failure to make such a disclosure.
Third, at oral argument, Speier’s counsel argued that even at the
postarbitration award stage of the case, Speier had an absolute right to disqualify the
arbitrator because of information the arbitrator did not disclose. To review, in order to
vacate an arbitration award based on a disclosure Speier wanted to have been made by
the arbitrator, the arbitrator had to have failed to disclose “a ground for disqualification.”
(§ 1286.2, subd. (a)(6)(A).) Speier once had the right to disqualify “one court-appointed
arbitrator without cause in any single arbitration” after the arbitrator made disclosures
under section 1281.9, but any such challenge to the arbitrator’s appointment had to be
made within 15 calendar days after service of the disclosure statement (§ 1281.91,
subd. (b)).
Speier did not make such a challenge during the statutorily proscribed time
frame. He did not make his challenge until after the Funds sought to confirm the
arbitration award. Section 1281.91, subdivision (c) provides that except as provided in
6
subdivision (d), “in no event may a notice of disqualification be given after a hearing of
any contested issue of fact relating to the merits of the claim or after any ruling by the
arbitrator regarding any contested matter. (Italics added.) At the procedural stage of
opposing the Funds’ motion to confirm the arbitration award, and while moving to have
the award vacated, Speier had to show the omitted disclosures were disqualifying within
the meaning of the governing statutes and ethics standards as a matter of law. For the
reasons discussed ante, he did not.

6
Subdivision (d) of section 1281.91 provides that if a ground for disqualification
specified under section 170.1 exists, “a neutral arbitrator shall disqualify himself or
herself upon the demand of any party made before the conclusion of the arbitration
proceeding.” (Italics added.)

16
 The statutory treatment of challenges to disclosures makes sense. If a party
is dissatisfied with an actual disclosure that is made by the arbitrator, the party has an
absolute one-time right to disqualify the arbitrator within 15 days. If a party challenges
confirmation and seeks to vacate an award already made because of a claim a disclosure
was not made, the party must show that such disclosure would have required
disqualification. This Legislature’s solution balances a party’s right to disqualify an
arbitrator based on disclosures actually made against a party’s remedy if the party
believes a disclosure must have been made but was not. Section 1286.2, subdivision
(a)(6)(A)’s requirement that the absent disclosure would have otherwise been
disqualifying is consistent with the rule that any error must be prejudicial to support
reversal.
IV.
CASES RELIED ON BY SPEIER
A.
Monster Energy Co. v. City Beverages, LLC
Speier heavily relies on the Ninth Circuit decision in Monster Energy Co. v.
City Beverages, LLC (9th Cir. 2019) 940 F.3d 1130 (Monster Energy). While that
opinion bears some similarities to the instant case, it is inapposite to the facts before us.
In Monster Energy, Anheuser-Busch distributor, Olympic Eagle, agreed to
sell Monster Energy drinks for 20 years in an exclusive territory. (Monster Energy,
supra, 940 F.3d at pp. 1132-1133.) When a dispute arose between the parties, Monster
Energy filed an action in the district court seeking to compel arbitration of the dispute
pursuant to Monster Energy’s form agreement with its distributors, including Olympic
Eagle. (Id. at p. 1133.) The district court ordered arbitration before JAMS Orange
County. (Ibid.) The parties agreed on an arbitrator from a list of seven proposed
arbitrators provided by JAMS. (Ibid.) The selected arbitrator disclosed, among other
things, like the arbitrator here, that he had an economic interest in the overall financial

17
success of JAMS, and “because of the nature and size of JAMS, the parties should
assume that one or more of the other neutrals who practice with JAMS has participated in
an arbitration, mediation or other dispute resolution proceedings with the parties, counsel
or insurers in this case and may do so in the future.” (Ibid.)
The arbitrator issued an interim award in favor of Monster Energy.
(Monster Energy, supra, 940 F.3d at p. 1133.) After Monster Energy filed a petition to
confirm the award, Olympic Eagle cross-petitioned for its vacatur on the ground the
arbitrator had failed to disclose he was a co-owner of JAMS and Monster Energy’s
business relationship with JAMS. (Ibid.) The district court confirmed the award and
Olympic Eagle appealed. (Ibid.)
The majority in Monster Energy framed the issues presented in this way:
“Our inquiry is thus two-fold: we must determine (1) whether the Arbitrator’s ownership
interest in JAMS was sufficiently substantial, and (2) whether JAMS and Monster were
engaged in nontrivial business dealings. If the answer to both questions is affirmative,
then the relationship required disclosure, and supports vacatur.” (Monster Energy, supra,
940 F.3d at p. 1136.) The majority held that the arbitrator’s right to a portion of profits
from all JAMS arbitrations was substantial. (Ibid.) The majority observed: “Monster’s
form contracts contain an arbitration provision that designates JAMS Orange County as
its arbitrator. As a result, over the past five years, JAMS has administered 97 arbitrations
for Monster: an average rate of more than one arbitration per month. Such a rate of
business dealing is hardly trivial, regardless of the exact profit-share that the Arbitrator
obtained. In sum, these facts demonstrate the Arbitrator had a ‘substantial interest in
[JAMS,] which has done more than trivial business with [Monster]’—facts that create an
impression of bias, should have been disclosed, and therefore support vacatur.” (Ibid., fn.
omitted.)
Monster Energy, supra, 940 F.3d 1130 is inapposite to the instant case for
several reasons. First, Monster Energy is a federal court decision interpreting federal law

18
and does not rely upon any California statute, Ethics Standards, or case law. (See Nagel
v. Twin Laboratories, Inc. (2003) 109 Cal.App.4th 39, 55 [“‘federal decisional authority
is neither binding nor controlling in matters involving state law’”].)
Second, the most glaring differences are that Monster Energy was a party
to the dispute, had appeared before JAMS repeatedly, and had JAMS written into its
arbitration agreement. None of those facts is present here. The arbitration provision in
the operating agreements did not require the use of or even suggest any particular
arbitrator or arbitration provider. Furthermore, it was Speier, not the Funds, who moved
to compel the arbitration of the parties’ disputes and for an order appointing an arbitrator
in this case.
Finally and significantly, the majority opinion concluded that Monster
Energy’s repeat business with JAMS, which included 97 matters in the previous five
years, was nontrivial, and that that nontrivial business history, coupled with the
arbitrator’s ownership stake in JAMS, triggered the duty to disclose. (Monster Energy,
supra, 940 F.3d at p. 1136.) Conspicuously absent from the opinion is any reference to
Olympic Eagle’s prior business dealings with JAMS, if any. (Id. at p. 1140, fn. 2 (dis.
opn.) [“There appears to be nothing in the record that indicates whether Olympic Eagle
was a repeat customer of JAMS or how frequently it engages in arbitrations”].) In the
absence of such information, the majority opinion in Monster Energy implicitly assumes
Olympic Eagle had little if any such prior business dealings with JAMS. The majority
expressed concern that disclosures of prior business dealings “are particularly important
for one-off parties facing ‘repeat players.’ See Lisa B. Bingham, Employment
Arbitration: The Repeat Player Effect, 1 Emp. Rts. & Emp. Pol’y J. 189, 209-17 (1997)
(finding that employees disproportionately failed to recover damages against
repeat-player employers compared to non-repeat-player employers).” (Id. at p. 1138,
italics omitted.)

19
 Here, Speier’s and the Funds’ arbitration counsel’s respective law firms had
significant business involvement with JAMS and had had an equal number of matters
before it in the preceding five-year period. So even if we were to adopt Monster
Energy’s “nontrivial” business dealings disclosure standard, on our record, the degree of
each law firm’s business dealings with JAMS was nontrivial in relation to the other.
And, of course, here there is no contention of undisclosed repeat business by a party.
B.
Advantage Medical Services, LLC v. Hoffman
Speier argues that the arbitrator was not excused from disclosing her
ownership interest in JAMS or JAMS’s business history with O’Melveny & Myers
because she was unaware of it. In support of his argument, Speier cites Advantage
Medical Services, LLC v. Hoffman (2008) 160 Cal.App.4th 806 (Advantage). Advantage
is also inapplicable to the instant case.
In Advantage, supra, 160 Cal.App.4th at page 809, the defendants sought
an order disqualifying the arbitrator and vacating an arbitration award after they had
learned that the arbitrator and his law firm had represented several protection and
indemnity clubs (P&I Clubs) which procured reinsurance support from syndicates of
Lloyd’s of London (Lloyd’s) and that Lloyd’s also had insured one of the plaintiffs in the
arbitration. The arbitrator had granted that plaintiff’s request to permit a representative
from its insurer to attend the arbitration without requiring the plaintiff to disclose to the
defendants, or apparently even to the arbitrator, the identity of that representative or the
insurer itself. (Id. at p. 818.)
Substantial evidence identified in detail in the opinion showed the
significant contacts and relationships between the arbitrator and his law firm to Lloyd’s—
the arbitrator would have been required to disclose such information had he known the
identity of the representative or the insurer itself. (Advantage, supra, 160 Cal.App.4th at
p. 819.) The arbitrator, however, denied the defendants’ requests for disclosure of the

20
identity of the insurer and/or the insurer’s representative who was present during the
arbitration. (Id. at p. 818.) Even after the arbitrator had learned the identity of the
Lloyd’s coverage counsel, he did not make any disclosures about his professional
relationship with Lloyd’s; “[c]onspicuously absent from the record is evidence of any
disclosure by [the arbitrator] regarding his or [his law firm’s] involvement with Lloyd’s
in representing P&I Club clients.” (Ibid.) The arbitrator later denied he or his law firm
ever represented a syndicate of Lloyd’s but did not address whether he or his law firm
had any other business relationship with or connection to Lloyd’s members or syndicates
other than an attorney-client relationship. (Id. at p. 818.)
Noting the “unusual and striking circumstances triggering defendants’
argument [the arbitrator] violated his disclosure obligations,” a panel of this court in
Advantage, supra, 160 Cal.App.4th 806 held the trial court did not err by vacating the
arbitration award because (1) the arbitrator had a duty, mandated by section 1281.85,
7
subdivision (a), through its incorporation of standard 9(a) of the Ethics Standards, to
inquire about the identity of the plaintiff’s insurer’s representative; (2) the arbitrator had a
mandatory obligation under section 1281.9 to disclose his and his law firm’s involvement
with Lloyd’s; (3) the arbitrator’s failure to inquire did not excuse his failure to make
mandatory disclosures; and (4) the information that the arbitrator failed to disclose
“‘could cause a person aware of the facts to reasonably entertain a doubt that [the
arbitrator] would be able to be impartial.’” (Id. at pp. 818-819.)
In Advantage, supra, 160 Cal.App.4th 806, the arbitrator’s failure to inquire
at least contributed to the arbitrator’s failure to make mandatory disclosures under the
relevant law. Here, even if we were to assume the arbitrator had had a duty to make
inquiries about her ownership status with JAMS and about JAMS’s business relationship

Standard 9(a) states: “A person who is nominated or appointed as an arbitrator must
7

make a reasonable effort to inform himself or herself of matters that must be disclosed
under standards 7 and 8.”

21
with O’Melveny & Myers during the five years preceding arbitration, any failure to make
such inquiries was harmless because, for the reasons discussed ante, such information
could not cause a reasonable person aware of the facts to doubt the impartiality of the
arbitrator.

DISPOSITION
The judgment is affirmed. Respondents shall recover costs on appeal.

FYBEL, J.

WE CONCUR:

BEDSWORTH, ACTING P. J.

GOETHALS, J.

22