Since its enactment in 2019, Code of Civil Procedure 1281.98, which governs arbitration fee payments, has been inviolate: arbitrators do not have the unilateral power to extend the fee payment deadline; “checks in the mail” do not satisfy the 30-day payment deadline; there are no extensions based on the date or method by which the invoice was issued; and the Federal Arbitration Act (“FAA”) may not preempt the California Arbitration Act, or the statutory fee payment deadline.

Despite these rulings, employers and their counsel continue to search for some reprieve against this draconian law.  The most recent attempt, occurring in Colon-Perez v. Security Industry Specialists, posited a new theory: the employer’s attorney’s mistake, inadvertence, and/or excusable neglect.  The facts, in relevant part, were relatively simple.  The employer’s attorney was out of the office for a two-week period, beginning on the date that the arbitrator issued the arbitration fee invoice.  Two days before her scheduled return, her home flooded due to extreme weather that impacted her area.  Due to the extensive damage, her home required remediation, and during that time, she “worked reduced hours while [she] navigated packing and moving out, meeting with remediation companies and contractors, …and inspections for homeowner’s insurance and federal emergency disaster relief through FEMA.” It was not until she saw a letter from the arbitrator, and after the missed payment deadline, that the attorney learned that the employer did not receive the arbitrator’s invoice, sent over a month before.

Both the trial court and the Court of Appeal were sympathetic, but unforgiving in light of the bright-line rule, which requires that the employer pay the arbitrator’s invoice within 30 days of the payment being due.  The Court of Appeal determined that neither “mandatory relief” nor “discretionary relief” for the attorney’s error could apply.  The court opined that “mandatory relief” is only applicable for “defaults, default judgments and dismissals.”  These do not include losing the right to arbitrate – as the right to a day in court still exists, specifically by moving the venue to the Superior Court.  Similarly, the court refused to provide discretionary relief.  Strictly construing the language of the statute and the legislative history, it reasoned that “while [past] cases did not consider the specific question before us, they strongly suggest the excuse-laden inquiry required for discretionary relief under [the statute granting a party relief because of attorney error] is incompatible with the “simple bright-line” rule set forth in [the arbitration fee payment statute] and the Legislature’s purpose in enacting it […] In short, the Legislature has made it clear it is not interested in in any excuses, even reasonable ones, as to why an employer fails to meet the 30-day payment requirement…”

Although the ruling in Colon-Perez is consistent with the language of the statute, it remains no less devastating for employers who, through no fault of their own, may miss an arbitration fee payment deadline.  As always, employers must remain vigilant in ensuring that arbitration invoices are timely paid.