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SUPERIOR COURT OF CALIFORNIA,

COUNTY OF SACRAMENTO
GORDON D SCHABER COURTHOUSE
MINUTE ORDER
DATE: 03/01/2016

TIME: 02:00:00 PM
JUDICIAL OFFICER PRESIDING: David Brown
CLERK: E. Brown
REPORTER/ERM: K. Hayes CSR# 8038
BAILIFF/COURT ATTENDANT: C. Chambers, M. Oreschak

DEPT: 53

CASE NO: 34-2016-00189567-CU-PT-GDS CASE INIT.DATE: 01/26/2016


CASE TITLE: California Hospital Association vs. SEIU United Healthcare Workers West
CASE CATEGORY: Civil - Unlimited

EVENT TYPE: Petition to Compel Arbitration - Civil Law and Motion

APPEARANCES
Eduardo G Roy, counsel, present for Respondent(s).
Matthew Silveira, counsel present for plaintiff
Nature of Proceeding: Petition to Compel Arbitration
TENTATIVE RULING
Petitioner California Hospital Association's ("CHA") Petition to Compel Arbitration is granted.
CHA's Request for Judicial Notice is granted.
Petitioner CHA seeks an Order under California Code of Civil Procedure section 1281.2 compelling
arbitration before Arbitrator Richard Ahearn of three complaints brought by CHA against Respondent
SEIU, United Healthcare Workers-West ("UHW") under the parties' written arbitration agreement. CHA
further seeks an Order consolidating a case filed in this Court, Case No. 342015-00187138-CU-CO-GDS, entitled SEIU, United Healthcare Workers - West, on its own behalf and
on behalf of Caring for Californians, LLC v. C. Duane Dauner, et al.. or staying that lawsuit pending
arbitration. On the date that this Petition was filed, the above referenced lawsuit was dismissed without
prejudice, rendering this aspect of the relief sought moot. However, the 3rd CHA complaint concerning
similar issues is not moot and is being ordered to arbitration.
The existence of the arbitration agreement is not in dispute. CHA and UHW signed the "Code of
Conduct" on May 5,2014, agreeing to be bound by Section IIl(B), "Meaningful Enforcement of the
Agreement", which provides that a "designated Arbitrator [would] resolve any disputes over the
application and interpretation of this Agreement" and that "[t]he Arbitrator [would] have final and
binding authority to enforce this Agreement and resolve issues that rise during the course of this
Agreement" (Blanchard-Saiger DecL, Ex. A, III(B).) California courts have long recognized that
similarly worded clauses are broadly construed to include all claims "rooted in the... relationship created
by [the parties'] contract" (Vianna v. Doctors' Mgmt Co. (1994) 27 Cal.App.4th 1186,1188,1190 [clause
covering "any dispute of any kind whatsoever, regarding the meaning, interpretation or enforcement of
the provisions of this Agreement"]; see also Merrick v. Writers Guild of Am.. W..Inc (1982) 130 Cal App
3d 212, 217, 219 [clause covering any dispute "concerning the interpretation of any of the terms of the
Basic Agreement and the application and effect of such terms as determined by an interpretation thereof

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CASE NO: 34-2016-00189567-CU-PT-GDS

reached tort action with "roots in the relationship between the parties which was created
by the collective bargaining provisions of their agreement"].)
Under a different section of the Code of Conduct, entitled "Purpose and Structure of the Agreement
Section D(1) Conditions Precedent and Subsequent," is a provision that if by January 1, 2016 the CHA
does not obtain agreement with certain hospitals providing the UHW certain rights at acute care
hospitals, "the Union shall be released from all further obligations under this Agreement, and this
Agreement shall terminate." Petitioner did not obtain the required agreement and the Code of Conduct
terminated on January 1, 2016.
The Arbitrator created the Arbitration Procedures Pursuant to the Code of Conduct, which states under
section VIII "Term" that "These Arbitration Procedures shall be in effect only while the Code of Conduct
remains in effect." (Ex. B to Declaration of Bruce Harland in opposition to Petition)
UHW has previously acknowledged the force of the arbitration agreement by arbitrating other complaints
before Arbitrator Ahearn, as agreed by the parties. (Kirschner Decl. Para.3.) UHW also had agreed in
December of 2015 to arbitrate the three complaints that are the subject of this Petition, however they
later contended they had no obligation to arbitrate.
CHA's First Complaint concerns an email UHW sent to a number of California hospital executives in
November, making numerous derogatory statements about CHA and its leadership. (Blanchard-Saiger
DecL Ex. E. at 2-5.) CHA's November 15, 2015 arbitration complaint alleged that the derogatory
language UHW used in the email violated Section I(B(I) of the Code of Conduct which requires that the
parties' address their differences in a "positive manner" and refrain from "personal attacks or derogatory
comments." (Blanchard-Saiger Decl. Ex. A, I(B(I); id Ex, E, at 1.) UHW responded that the email was
not "derogatory" or "negative," and did not constitute a "personal attack." (Blanchard-Saiger Ex. E, at 1.)
In its Second Complaint CHA alleged that UHW's sponsorship and support of the
Hospital Executive Compensation Act of 2016 violated Sections 1(B) and 11(C) of the Code of Conduct
by which UHW agreed not to "sponsor or support... initiatives adverse to the California hospital industry"
or make comments "raising concern about... executive compensation in health care." (Blanchard-Saiger
Decl. Ex. F, at 2-3.) UHW responded that for various technical reasons, the alleged acts did not violate
the Code of Conduct's terms. (Id. at 1)
UHW has conceded that the first two complaints are arbitrable. (See Blanchard-Saiger Decl. Ex. E, at 1
[UHW suggests that CHA "simply contact the Arbitrator to schedule an arbitration" and advises that
UHW believed that "an in person arbitration with witnesses will be necessary"]; id. Ex. F, at 1 [UHW
explains that the "Union is certainly committed to litigating this complaint within the 60 day time frame as
negotiated by the parties"].)
CHA's Third Complaint in arbitration concerns the lawsuit UHW brought against four CHA officers,
accusing them of violating a fiduciary duty to CFC and committing various torts. (Sacramento Superior
Court Case No. 2015-00187138-CU-CO-GDS) Among the Anti-Employer activities Section 1(B)(2)
expressly prohibits is "litigation" that is "directed at or with respect to CHA... and any of [its] officers,
directors, managers or shareholders." (Blanchard-Saiger DecL Ex. A, I(B(2).) CHA contends that
UHW's lawsuit breaches the provision; UHW contends it does not. This dispute involves the
interpretation and application of Section I(B)(2). Thus, the dispute fells squarely within the scope of the
arbitration agreement. The fact that the Superior Court Complaint arising from the same dispute was
dismissed without prejudice does not now "moot" the dispute extant in the Third Complaint; more
importantly it does not moot the petition to compel arbitration. UHW contends that the dispute is not
arbitrable because it sued CHA's officers in their capacity as CFC directors. (See Blanchard-Saiger Decl.
Ex. H, at I.) However, UHW agreed that it would not initiate litigation against any of CHA's officers, and

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there is no exception to permitting UHW to initiate litigation against CHA officers due to their
participation in the CFC.
UHW contends that they have no obligation to arbitrate the three complaints because the Code of
Conduct terminated on January 1, 2016. The Arbitration clause provides that "the Union is released
from all further obligations under this Agreement" if the contract is terminated. UHW contends that this
release language includes any obligation to arbitrate disputes that arose during the agreement. UHW
also contends that the Arbitrator's Procedure that provides that "These Arbitration Procedures shall be in
effect only while the Code of Conduct remains in effect," is further evidence that the arbitration
agreement cannot be enforced after the date the Code of Conduct terminated. Counsel for UHW Bruce
Harlan was involved in the drafting of the Code of Conduct and he states that the language releasing
UHW from all of its obligations under the agreement was intended to include the obligation to arbitrate
disputes that arose during the time the Code of Conduct was in effect. (Declaration of Bruce Harlan)
California law favors enforcement of arbitration agreements. Moses H. Co. Memorial Hospital v. Mercury
Construction Corp. (1983) 460 U.S. I , 24-25. "Any doubts as to whether an arbitration clause applies to
a particular dispute should be resolved in favor of requiring the parties to arbitrate." Larian v. Larian
(2004) 123 Cal.App.4th 751, 759. The moving party has the burden of proving the existence of a valid
arbitration clause and the dispute is covered by the clause. (Larian, supra, 123 Cal.App.4th at p. 760.)
Once the existence of a valid arbitration clause has been established, the burden is on the party
opposing the arbitration to demonstrate that arbitration cannot be interpreted to require arbitration of the
dispute. (Buckhorn v. St. Jude Heritage Medical Group (2004) 121 Cal.App.4th 1401, 1406.)
Disputes following the termination of an agreement that contains an arbitration clause are presumed
arbitrable where the dispute involves facts and occurrences that arose before expiration. (See Litton Fin.
Printing Div. Inc. v. NLRB (1991) 501 U.S. 190, 205-06; see also Ajida Techs., Inc. v Roos Instruments,
Inc.(2001) 87 Cal.App.4th 534, 545-46 [relying on Litton and "expressly hold[ing] that a party's
contractual duty to arbitrate disputes may survive termination of the agreement giving rise to that duty"].)
There are "'strong reasons" for this presumption. (Ajida, supra, 87 Cal.App.4th at p. 546) Otherwise, any
party to a contract containing an arbitration agreement could avoid its duty to arbitrate a dispute by
terminating the contract and filing suit the next day. (See Nolde Bros. Inc. v Local No. 358, Bakery &
Confectionary Workers Union AFL-CIO (1977) 430 U.S. 243, 252.)
The facts and occurrences underlying each of CHA's three arbitration complaints arose before the Code
of Conduct terminated. CHA initiated, and UHW answered, each Complaint before January 1, 2016.
Thus, each complaint is presumptively arbitrable. (See Coast Plaza Doctors Hosp. v Blue Cross of Cal
(2000) 83 Cal App.4th at 677 [ordering arbitration of dispute arising from insurer's alleged bad-faith
refusal to renegotiate contractual reimbursement rates with provider notwithstanding provider's decision
to terminate entire contract after negotiations broke down but before filing suit]; Operating Eng 'rs Local
Union No. 3 v. Newmont Min. Corp. (9th Cir. 2007) 476 F.3d 690, 693 [ordering arbitration where parties
dispute ''involve[d] facts and occurrences that arose before expiration of the parties' agreement]).
UHW relies on language in the Code of Conduct that if "an insufficient number of hospitals or health
systems execute Conditional Access Agreements... the Union shall be released from all further
obligations under this Agreement and this Agreement shall terminate." (Kirschner DecL Ex. H. at 5,7.)
The condition precedent language relied on by UHW to resist arbitration does not rebut the presumption
of arbitrability. Courts enforce arbitration clauses following the termination of a contract even where the
contract states "that '[n]o rights or obligations created by or arising out of [the contract] shall extend
beyond its termination." (Gen. Drivers, Local Union No. 984 v. Malone & Hyde (6th Cir. 1994) 23 F.3d
1039, 1045-46 [construing arbitration clause in collective bargaining agreement].)
As argued by CHA, if a general release upon termination were enough to eliminate the obligation to

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arbitrate, the presumption of post-termination arbitrability would apply only to contracts that expressly
provide for post-termination arbitration, an exception that would swallow the rule. Under the
presumption, the parties' failure to exclude from arbitrability contract disputes arising after the contract
termination is a manifestation of intent to conclude that they intended to arbitrate all grievances arising
out of the contractual relationship. (Nolde Bros., supra, 430 U.S. at p. 255.) If the parties had wanted to
eliminate post-termination arbitration of disputes arising from the contract they could have easily done so
by including a provision extinguishing the parties' post-termination obligations in Section III, the Section
governing the parties' arbitration rights. (Blanchard-Saiger Decl. Ex. A, III)
The arbitration agreement in this case expressly grants the arbitrator "final and binding authority to
enforce the Agreement and resolve issues that rise during the course of this Agreement"
(Blanchard-Saiger Decl. Ex. A, III(B) It does not require that the Code of Conduct remain in effect
during arbitration.
UHW incorrectly asserts that the default rule, providing that arbitration obligations survive contract
termination, applies only in the collective bargaining context, contrary to the many authorities cited by
CHA (See e.g. Ajida Technologies, Inc. v. Roos Instruments, Inc. (2001) 87 Cal.App.4th 534.) The
presumption favoring post-termination arbitration is not limited to the labor context.
UHW contends CHA waived its right to arbitrate by unreasonably delaying asserting its claims just
before the contract terminated. The Court rejects this assertion for the reasons set forth in the Reply.
The Court also rejects UHW's argument that the language in the arbitration procedures signed by the
arbitrator stating that, "These Arbitration Procedures shall be in effect only while the Code of Conduct
remains in effect," (Ex. B to Declaration of Bruce Harland) somehow overrides the parties' arbitration
agreement. The arbitration agreement is severable and survives changes to the contract in which the
agreement is found. (See Saint Agnes Med Cente v. PacifiCare of Cal. (2003) 31 Cal.4th 1187,1198.)
Moreover, the content of UHWs responses to CHA's arbitration demands evidences their understanding
that they had the obligation to arbitrate the three disputes even after the contract terminated. December
4, 2015, UHW responded to the Second Complaint by assuring CHA that it was "committed to litigating
this complaint within the 60 day time frame as negotiated by the parties," but asserted that the arbitration
hearing would have to be held in "the new year." (Blanchard-Saiger Decl. Ex. F, at 1.) UHW gave no
indication that it believed it would not have a duty to arbitrate in "the new year," even though, as UHW
later confirmed, CHA had previously informed UHW that it was "highly remote" that the Code of Conduct
would survive January 1, 2016. UHWs statements appear designed to assure CHA that UHW would live
up to its contractual obligations and that CHA's disputes would be arbitrated in due course. Based on
UHWs representations, CHA contacted Arbitrator Aheam in December 14, 2015 to schedule arbitration
hearings on all three complaints in January. (Kirschner DecL Ex. H, at 9-10.) Only after Arbitrator Ahearn
proposed several January dates for hearings did UHW express its intention to refuse to arbitrate the
disputes. The Court also believes that the Arbitrator's agreement to hold the arbitrations after the
contract ended undermines defendant's argument that the Arbitrator intended that no arbitration could
occur after the contract termination because the "arbitration procedures do not survive the termination of
the Code of Conduct."
UHW has failed to meet its burden to show that the arbitration clause cannot be interpreted to require
arbitration. "The burden must fall upon the party opposing arbitration to demonstrate that an arbitration
clause cannot be interpreted to require arbitration of the dispute." Coast Plaza, supra, pp. 686-687.
Thus, if there is any reasonable doubt as to whether the claims come within the Code of Conduct's
arbitration clause, that doubt must be resolved in favor of arbitration, not against it.
The prevailing party shall prepare a formal order for the Court's signature pursuant to C.R.C. 3.1312.

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COURT RULING
The matter was argued and submitted. The matter was taken under submission.
Later that day, the Court affirmed the tentative ruling.
MATTHEW SILVEIRA
JONES DAY
555 CALIFORNIA STREET
26TH FLOOR
SAN FRANCISCO, CA 94104-1500
EDUARDO G. ROY
THE MILLS BUILDING
220 MONTGOMERY STREET
SAN FRANCISCO, CA 94104

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