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Tuesday, May 3, 2016

Sheppard, Mullin, Richter & Hampton, LLP v. J-M Manufacturing: Cal. Supreme Court Grants Review in Attorney Fee Arbitration Battle

Sheppard, Mullin, Richter & Hampton, LLP v. J-M Manufacturing Co., Inc. (2016) 244 Cal.App.4th 590 is not an employment law case, but it raises an interesting arbitration issue that may end up having an impact on employment law practice. The California Supreme Court granted review on April 27, and the issues presented are listed as follows:
(1) May a court rely on non-legislative expressions of public policy to overturn an arbitration award on illegality grounds?  
(2) Can a sophisticated consumer of legal services, represented by counsel, give its informed consent to an advance waiver of conflicts of interest?  
(3) Does a conflict of interest that undisputedly caused no damage to the client and did not affect the value or quality of an attorney’s work automatically (i) require the attorney to disgorge all previously paid fees, and (ii) preclude the attorney from recovering the reasonable value of the unpaid work?
The first issue obviously is of greatest interest for our purposes. Sheppard Mullin is case number S232946, and the Court's web page for it is here.

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