USA – CALIFORNIA Trends and Developments Contributed by: Jennifer J. McCall, Paul Fraidenburgh, Alexandria Marx and Maria Williams, Pillsbury Winthrop Shaw Pittman LLP
Litigation often continues because it is difficult to understand the perspectives of other parties. In this case, particular care was taken to ensure that all par- ties could appreciate differing viewpoints. Patient dialogue allowed opposing lawyers to explain their concerns and areas of difficulty, which is especially important where technical misunderstandings arise. In another case, the importance of analysing the law in light of the tribunal making the determination became evident. A County Commission was asked to vacate easements in a housing development. Relying on Daniels v Area Plan Commission of Allen County , the opposing litigants successfully argued that removing private property rights and transferring them to anoth- er private party would constitute an unconstitutional taking under the Fifth and Fourteenth Amendments. While the government may exercise eminent domain for public purposes with compensation, doing so for private benefit is impermissible. The key factor was that the County Commission constituted a governmental body, making the action unconstitutional. By contrast, where a court is deter- mining whether such rights exist in the first instance, the takings argument may not succeed. However, a due process argument may still arise, as suggested in Stop the Beach Renourishment , Inc . v Florida Depart- ment of Environmental Protection . Accordingly, legal arguments must always be analysed in the context of the tribunal deciding the matter. Building on this, another important aspect of recent California disputes is the choice of forum for dispute resolution. Tribunal: where should you resolve your dispute? Trust disputes are inherently sensitive. Many individu- als prefer not to have family or business disagree- ments aired publicly, and therefore opt for settlement or arbitration instead of court proceedings. Arbitration Arbitration is often more private, and less formal, expensive, and invasive than litigation. Litigation can go on for many years, involves lengthy discovery inquiries, and multiple public court hearings.
In the past three months of 2026, 428 cases have been filed in California through the Financial Industry Reg- ulatory Authority (FINRA) arbitration resolution, 92% of which have been successfully resolved. Between 2021–2025, an average of 2,802 cases (annually) were filed in California through FINRA. Although FINRA manages arbitrations between individuals and corpo- rate entities, these statistics demonstrate that arbitra- tion is a common means for many parties seeking to resolve disputes. Arbitration does have some limitations. Arbitration agreements must be in writing to be enforced. (See California Code of Civil Procedure, Section 1281.) Fur- thermore, the arbitrators are given significant defer- ence to the outcome, even if it is not to the satisfaction of either party. (See Bols , LLC v Levine , No. D084595, 2025 WL 31648, at *1 (12 November 2025) (finding the arbitrator did not exceed his power to refuse to hear material evidence, and substantial evidence sup- ports the trial court’s alter ego findings); Singh v Reedy Mechanical Inc ., No. CD100084, 2025 WL 3294023, at *1 (26 November 2025) (defendant appealed the award to plaintiff, arguing that the arbitrator (i) was biased; (ii) exceeded her powers in declaring a lease void and invalid; and (iii) should not have been decid- ed by the arbitrator, but the court affirmed).) Arbitration may still result in litigation According to the Judicial Council of California, a total of 41,985 trust, estate, and other matters were filed in California superior courts in the 2024–25 fiscal year. (Court Statistics, Judicial Council of California.) That number has remained steady since the pandemic. (See id.) About half are resolved. (See id.) Further, arbitration agreements are only enforceable and binding against their signatories. (See McArthur v McArthur , 224 Cal. App. 4th 651, 653 (11 March 2014) (holding that the arbitration clause could not be invoked by a beneficiary because she was not a signatory to the arbitration agreement); see also NNN Capital Fund I , LLC , Plaintiff and Respondent , v Todd A . Mikles et al ., Defendants and Appellants, No. G064487, 2026 WL 787598, at *1 (20 March 2026) (finding on appeal that the plaintiff trust fund representatives lacked standing to bring their breach of fiduciary duty claims, thereby vacating the arbitra-
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