Christenten v. Smith, Consol. Case Nos. G039923 & G040103, 2009 WL 499748 (Cal. Ct. App. Feb. 28, 2009), upheld the general rule that arbitration awards are not subject to appellate review based on legal error of the arbitrator.
The Court's decision hinged upon its construction of the rule set forth in the California Supreme Court's recent decision in Cable Connection, Inc. v. DIRECTV, Inc. 44 Cal.4th 1334 (2008). There, the supreme court held that parties to a contract may narrow the scope of the the powers of an arbitrator by expressly stating that the arbitrator shall not have the power to commit errors of law and legal reasoning and that such errors would be subject to judicial review.
Here, in Christensen, the plaintiff argues that the same rule should apply because the arbitration clause in the contract at issue states that the arbitrator “shall render an award in accordance with substantive California law” (emphasis in original). The Court disagrees, stating that the phrase “substantive California law” merely amounts to a forum selection clause. Since the arbitration agreement did not expressly limit the powers of the arbitrator, the arbitration award is not subject to appellate review.