Preliminary Injunction Is Not Appealable If Issued by an Arbitrator

Nosing out whether an order is appealable can be difficult. But we know injunctions are appealable because they are listed explicitly in Code of Civil Procedure section 904.1, the appealability statute. But a preliminary injunction issued by an arbitrator is not. They are not a final “award,” and thus not appealable. That is the holding of *Kirk v. Ratner* (D2d7 Feb. 10, 2022) --- Cal.Rptr.3d --- (2022 WL 405422).

The parties settled their show business dispute, agreeing to confidentiality. Worried that Kirk would breach confidentiality, the movie executives initiated arbitration. The arbitrator issued a temporary restraining order followed by a preliminary injunction. The movie executive plaintiffs were not required to post a bond for the injunction.

Kirk petitioned the superior court to vacate the injunction. The court dismissed the petition on grounds it lacked jurisdiction because the preliminary injunction was not an “award” under Code of Civil Procedure section 1283.4.

Kirk appealed. But the Court of Appeal dismissed the appeal, holding both that the preliminary injunction was not an “award” subject to a petition to vacate, and the order dismissing the petition was not appealable for the same reason.

An Arbitrator’s Preliminary Injunction Is Not an “Award” Subject to a Petition to Vacate or Appeal:

A superior court may only review an arbitrator’s “award.” The preliminary injunction was not an “award,” so it was not reviewable.

Section 1283.4 defines an arbitrator's “award” as a written ruling that “include[s] a determination of all the questions submitted to the arbitrators the decision of which is necessary in order to determine the controversy.” “The issuance of an ‘award’ is what passes the torch of jurisdiction from the arbitrator to the trial court.” (Lonky v. Patel (2020) 51 Cal.App.5th 831, 843 (Lonky).)

True, had the superior court issued the preliminary injunction, it would have been immediately appealable under Code of Civil Procedure section 904.1(a)(6). But arbitrator injunctions are not governed by section 904.1. Only those arbitrator orders that are “awards” under section 1283.4 may be reviewed by the superior court.

Federal law is different. But that is because federal law is governed under the Federal Arbitration Act (FAA) (9 U.S.C. § 1 et seq.), which differs from those in the California Arbitration Act by allowing for immediate review of certain interlocutory or partial awards.

The appellants argued that no published California case has considered whether arbitrator preliminary injunctions are reviewable. And the court did not point to any. So bookmark Kirk.

The Trial Court Order — Dismissing the Petition to Vacate the Arbitrator’s Preliminary Injunction — Was Itself Nonappealable:

The court’s second holding is subtle. The court held that, after the arbitrator issued the preliminary injunction, the trial court’s order denying the petition to vacate that injunction was itself nonappealable. Recall that the court just held that the arbitrator’s injunction was not appealable. Thus, the trial court’s order denying the petition to vacate was legally correct. So why wasn’t that the end of the opinion?

Because efficiency. Former cases had read into section 1294(c) a requirement that the underlying arbitration award be final. And the court agreed with those cases here. “Without such a requirement, a wide variety of orders vacating (or dismissing petitions to vacate) interim arbitration awards would be appealable, which would interfere with the “ ‘efficient, streamlined procedure[ ]’ ” that is supposed to be arbitration's ‘fundamental attribute.’ ” (Judge v. Nijjar Realty, Inc. (2014) 232 Cal.App.4th 619, 634 (Judge).)

Comments: A few thoughts about the opinion:

1. Challenges to preliminary injunctions, once their are effectuated, often become moot. This is particularly the case with mandatory injunctions. So the reason injunctions are appealable is to protect the jurisdiction of the reviewing court: if they are not appealed immediately, they might evade review. This policy or institutional consideration did not appear in the court’s analysis here. The court just followed the text of section 1283.4. But the court did not exclude all policy or institutional considerations in its analysis of section 1283.4. The court did consider the policy of making arbitration an “efficient, streamlined procedure.” And on that basis, the court read into section 1283.4 an additional requirement for reviewability. So the touchstone for the court here does not appear to be the text of the statute.
2. The court did not reach the bond issue. Recall that the arbitrator did not require the party seeking the preliminary injunction to post a bond. That itself was reversible error. Code of Civil Procedure section 529, subdivision (a) imposes a mandatory duty on the trial court to require a bond. (Neumann v. Moretti (1905) 146 Cal. 31, 32–34; ABBA Rubber v. Seaquist (1991) 235 Cal.App.3d 1, 10 [the duty to require an undertaking is mandatory not discretionary because the obligation is not contingent upon the parties' request].) “Without the bond a preliminary injunction is a nullity. [Citations.]” (Oksner v. Superior Court (1964) 229 Cal.App.2d 672, 687; Miller v. Santa Margarita Land etc. Co. (1963) 217 Cal.App.2d 764, 766 [an injunction is “of no effect” when it does not require the mandatory undertaking]; see also Condor Enterprises, Ltd. v. Valley View State Beach (1994) 25 Cal.App.4th 734, 741 [the failure to comply with the statutory scheme requiring a bond is a jurisdictional defect which preclude holding noncompliant party subject to injunction in contempt].)
3. Preliminary injunctions are already a powerful device. And under the Kirk holding, they may be devastating, leaving no right of direct review. The only real check on a preliminary injunction in many cases is the bond, and under Kirk there is no real way to enforce that safeguard.
4. Other recent arbitration opinions have trended toward broadening review of arbitrator awards, and casting some suspicion on private judging. (.g., here, here.) Not this opinion. This opinion greatly expands arbitrators’ power to order early equitable relief.

The Upshot: If an arbitrator issues a preliminary injunction against you, consider seeking review by writ.

Tim Kowal helps trial attorneys and clients win their cases and avoid error on appeal. He co-hosts the Cal. Appellate Law Podcast at www.CALPodcast.com, and publishes a newsletter of appellate tips for trial attorneys at www.tvalaw.com/articles. His appellate practice covers all of California's appellate districts and throughout the Ninth Circuit, with appellate attorneys in offices in Orange County and Monterey County. Contact Tim at tkowal@tvalaw.com or (714) 641-1232.

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