California High Court Surprises by Expanding Arbitration Review

California's high court made a major decision to permit judicial review for legal error, as long both parties contractually agree to review beforehand.  

The ruling arose from a suit filed by retailers who had contracted with Kirkland client DIRECTV Inc. to provide customers necessary equipment to receive DIRECTV's satellite signal. The retailers claimed DIRECTV withheld commissions and assessed inappropriate charges.

"Michael Baumann, a partner in Kirkland & Ellis' Los Angeles office who represented DIRECTV, said the ruling is a 'pretty big deal.'

'It allows parties to be certain that the California courts will enforce their agreed-upon rules of arbitration," he said. "It's neutral. It is equally protective of plaintiffs and defendants.' "

This article appeared in its entirey in the August 26, 2008 edition of The Recorder.