Due process and nonconsensual binding arbitration

[Scarberry, Mark]

Here in California, Gov. Davis has on his desk a bill passed by the
legislature mandating binding arbitration where growers and farm labor
unions are unable to reach agreement on a collective bargaining agreement.
(The bill is S. 1736, authored by State Senator Burton.) The arbitrator
would be appointed by the Cal. Agricultural Labor Relations Board and would
"establish the terms of a collective bargaining agreement and direct
specific performance of that agreement." Judicial review would be limited to
the typical review given to arbitration awards made pursuant to arbitration
agreements. See Cal. Code Civ. Proc. sec. 1286.2(a), copied below. Absent
corruption, fraud, or misconduct the arbitrator's award would be enforced
and could not be vacated.

My initial reaction was that a law imposing such nonconsensual binding
arbitration would violate due process by requiring a person to submit to a
decision by a private arbitrator with no effective judicial recourse. Here
especially, where the law provides no articulable standards for the decision
of the arbitrator and where the arbitrator is given such power over the
parties, it seemed to me that the law would amount in effect to a directive
to a private party to do whatever some other private party requires. That
seems inconsistent with notions of liberty and rule of law that should be
protected under the 14th amendment's due process clause.

Of course in our administrative state lots of adjudication is done by
nonjudges. And of course the legislature could effectively set the terms of
employment by enacting minimum wage laws, laws dealing with working
conditions, laws dealing with grounds for firing employees, etc. But here
the bill would authorize private arbitrators to set these terms individually
for each grower with no effective judicial review and apparently no
requirement of uniformity.

I'm particularly interested in any views list members may have on whether
due process requires that the law provide arbitrators (or judges or admin.
law judges) articulable standards for decision. Of course there may be bases
other than due process for challenging the bill (separation of powers, equal
protection, possible state constitutional rights, etc.).

FYI:
Apparently the seminal article on nonconsensual arbitration is John Allison,
The Context, Properties, and Constitutionality of Nonconsensual Arbitration,
1990 J. Dispute Res. 1.

Interesting cases include:

A. Fred Miller, Attorneys at Law, P.C. v. Purvis
921 P.2d 610
Alaska,1996.
Upholding nonconsensual arbitration imposed on attorneys with regard to
fees, despite lack of meaningful judicial review.

Bayscene Resident Negotiators v. Bayscene Mobilehome Park
18 Cal.Rptr.2d 626
Cal.App. 4 Dist.,1993
Holding unconstitutional municipal ordinance requiring arbitration where
mobilehome park owner and tenant could not agree on rent.
"Here, to find the arbitration provision constitutional, this court would be
required to delete the word "binding" or to add a requirement for a trial de
novo or judicial review of the arbitration award for sufficiency of the
evidence." 18 Cal. Rptr. at 636.

Hohe v. Casey
956 F.2d 399
C.A.3 (Pa.),1992.
Holding unconstitional a state labor law that would require arbitration
(binding or not) of fed const. claim under Hudson; state could not impose
preconditions on section 1983 action.

Mengel Co. v. Nashville Paper Products & Specialty Workers Union, 221 F.2d
644 (6th Cir. 1955), citing Chas. Wolff Packing Co. v. Court of Industrial
Relations of State of Kansas, 43 S.Ct. 630 (1923), for the proposition that
"Compulsory arbitration, without right to have the issue determined by court
action, is invalid."

The N.M. Atty Gen. considered the issue at 2002 N.M. Op. Atty. Gen. 01,
(2002) (available on Westlaw).

There is also an old ALR annotation, 55 A.L.R.2d 432 (1957),
CONSTITUTIONALITY OF ARBITRATION STATUTES, that includes citations on the
issue of nonconsensual arbitration.

Cal. Code Civ. Proc. sec. 1286.2(a):
(a) Subject to Section 1286.4, the court shall vacate the award if the court
determines any of the following:
(1) The award was procured by corruption, fraud or other undue means.
(2) There was corruption in any of the arbitrators.
(3) The rights of the party were substantially prejudiced by misconduct of a
neutral arbitrator.
SDU_2(4) The arbitrators exceeded their powers and the award cannot be
corrected without affecting the merits of the decision upon the controversy
submitted.
(5) The rights of the party were substantially prejudiced by the refusal of
the arbitrators to postpone the hearing upon sufficient cause being shown
therefor or by the refusal of the arbitrators to hear evidence material to
the controversy or by other conduct of the arbitrators contrary to the
provisions of this title.
(6) An arbitrator making the award either: (A) failed to disclose within the
time required for disclosure a ground for disqualification of which the
arbitrator was then aware; or (B) 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.
However, this subdivision does not apply to arbitration proceedings
conducted under a collective bargaining agreement between employers and
employees or between their respective representatives.

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