California Supreme Court Rules on Deposition Limit in Arbitration Agreement

In Ramirez v. Charter Communications Inc., the California Supreme Court examined whether a four-deposition limit in an arbitration agreement was fair in a workplace discrimination case.

An article from Esquire Deposition Solutions discusses a lawsuit involving a plaintiff who was terminated by Charter Communications. She challenged the agreement, arguing that the limitations it imposed would unfairly hinder her ability to pursue claims of discrimination, harassment, and retaliation under California’s Fair Employment and Housing Act. She indicated that seven depositions were necessary to adequately present her case.

California law permits arbitration agreements to restrict discovery more than traditional litigation. However, they must still allow sufficient discovery for claims to be fairly arbitrated. The critical question was whether the arbitrator could order additional depositions. The appellate court ruled that the arbitrator lacked that authority.

Arbitrator’s standards vary. JAMS, for example, grants each party one deposition by right, with the option for more if ordered by the arbitrator or agreed upon by the parties. AAA allows the arbitrator full discretion to order discovery, including depositions, if deemed essential for fair issue resolution.

In the Ramirez case, the California Supreme Court overruled the appeals court. In July 2024, it concluded that the arbitration guidelines provided the arbitrator discretion to resolve discovery disputes fully, including ordering additional depositions if necessary to ensure “a full and equal opportunity” to present evidence.

This ruling indicates that strict, inflexible deposition limits in an arbitration agreement may be unenforceable if they prevent adequate discovery.