Sprint may be best known as the only mobile phone provider offering a truly unlimited data plan. In Ayyad v. Sprint Spectrum, L.P., __ Cal.App.4th __ (No. A133824, Oct. 29, 2012), however, Division Five of the First Appellate District denied Sprint comparable service, and disconnected Sprint’s plea for “unlimited” jurisdiction following an earlier remand.
Ayyad reiterates the rule that an appellate opinion’s dispositional language—which is typically reflected in the court’s remittitur—controls the scope of the trial court’s jurisdiction on remand such that any trial court action that exceeds that scope is void.
Round I: Trial, Appeal, And Limited Remand
Ayyad began in 2003 as part of a coordinated proceeding, when Sprint subscribers filed complaints claiming that Sprint’s early termination fees violated California’s Consumer Legal Remedies Act and Unfair Competition Law, among other things. In its answer, Sprint asserted multiple defenses, including setoff and arbitrability, and later cross-complained against the plaintiffs for breach of contract.
What Sprint did not do, however, was move to compel arbitration. That option was arguably available to Sprint in 2003, since it was not until 2005 that the California Supreme Court ruled, in Discover Bank v. Superior Court, 36 Cal.4th 148 (2005), that class action waivers in arbitration contracts were unenforceable as unconsionable contracts of adhesion.
In 2006, the trial court certified plaintiffs’ claims as a class action, ordering an “aggregate approach to monetary relief and the related setoff and cross-claim issues.” The court ordered that in no event would Sprint be entitled to a net recovery against the class members. The case went to trial in 2008, with both sides prevailing on their respective claims. The jury determined that Sprint owed the class members $74 million but that the class owed Sprint $225 million, or a net recovery of $151 million. In accordance with its earlier order, the court reduced Sprint’s net recovery to zero and entered judgment accordingly.
The court then granted in part plaintiffs’ motion for a new trial, limited to the amount of Sprint’s cross-complaint damages and the court’s setoff calculation. Both sides appealed.
The Court of Appeal affirmed the trial court “in all respects.” The dispositional language of its opinion stated: “The judgment of the trial court is affirmed. The matter is remanded for retrial on the issue of Sprint’s damages, and the calculation of any offset to which Sprint may be entitled.”
While Sprint’s petition for review to the California Supreme Court was pending, the U.S. Supreme Court decided AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011). Concepcion abrogated the Discover Bank rule, finding that rule preempted under the Federal Arbitration Act. Meanwhile, Sprint’s petition for review was denied and the Court of Appeal issued its remittitur, which reflected the Court’s dispositional language. At no time did Sprint seek to recall the remittitur or to have its terms modified in light of Concepcion—indeed, at no time did Sprint bring Concepcion to the attention of the Court of Appeal or the Supreme Court.
Round II—Motion To Compel Arbitration Denied And A New Appeal
Back in the trial court, instead of proceeding to the new trial as ordered, Sprint moved to compel arbitration of the named plaintiffs’ claims under Concepcion. It argued that it had not sought arbitration earlier because “any attempt would have been futile.”
The trial court denied Sprint’s motion, finding it lacked jurisdiction because the remittitur had limited the remand to “the issue of Sprint’s damages, and the calculation of any offset.” The court ruled it lacked the authority to retry other issues or to make additional findings. The court alternatively ruled that Sprint had lost its right to arbitration by moving to compel well after the “litigation machinery” had been “substantially invoked.” Sprint appealed from the order denying its motion to compel.
The Court of Appeal Hangs Up On Sprint And Enforces The Remittitur’s Limited Scope
The Court of Appeal affirmed, holding that in moving to compel arbitration, Sprint had largely ignored the language of the remittitur. A trial court, the Court said, must pay scrupulous heed to the appellate court’s remand directions such that any adjudication of issues outside the remittitur’s scope is void. See Hampton v. Superior Court, 38 Cal.2d 652, 655 (1952) (“When there has been a decision upon appeal, the trial court is reinvested with jurisdiction of the cause, but only such jurisdiction as is defined by the terms of the remittitur.”). So strict is this jurisdictional rule, Ayyad noted, that the trial court must obey the remittitur even if the appellate court’s decision “‘has been impaired by subsequent decisions’” or is “unequestionably legally erroneous.”
Applying these rules, Ayyad noted that once its previous opinion became final and the remittitur issued, “the issues adjudicated by the judgment were conclusively determined.” The Court rejected Sprint’s “untenable” and “extremely troubl[ing]” argument that the trial court could order arbitration on the ground that the earlier opinion had not addressed that issue and because the remittitur did not bar arbitration. As the Court put it, it is “unnecessary and inappropriate for an appellate court to attempt to envision and to set forth in detail the entire universe of matters prohibited by its directions on remand.”
Ayyad is not the only time the remittitur rule has prevented a party from relying on a new development in the law. In Griset v. Fair Political Practices Commission, 25 Cal.4th 688 (2001), a political candidate and his committees were fined under a statute that required candidates and their supporters to identify themselves on mass mailings sent to prospective voters. They challenged the statute’s constitutionality but the trial court, Court of Appeal, and Supreme Court all rejected the challenge in a judgment that became final in 1994 with the issuance of an unqualified remittitur. In 1995, the U.S. Supreme Court decided McIntyre v. Ohio Elections Commission, 514 U.S. 334, holding unconstitutional the imposition of fines on an individual who anonymously distributes leaflets. Armed with McIntyre, plaintiffs purported to “renew” their summary judgment motion in the trial court, again challenging the statute’s constitutionality. The California Supreme Court held that the trial court “[could not] reopen the case on the facts” because the remittitur had unqualifiedly affirmed the prior judgment, ending the litigation. See also People v. Dutra, 145 Cal.App.4th 1359, 1367 (2006) (change in law relieving court from conducting sentencing hearing did not authorize trial court to disregard remittitur that ordered new sentencing hearing); Skaggs v. City of Los Angeles, 138 Cal.App.2d 269, 272 (1956) (appellate affirmance of judgment erroneously awarding interest barred trial court from determining interest or other matters on remand).
Conclusion: No Call-Backs
Ayyad restates the mandate that a trial court’s jurisdiction on remand depends entirely on the directives in the appellate court’s remittitur. So strict is this rule is that it will not bend when a significant change in law opens up an avenue for relief that was previously foreclosed.
Although this result might seem unfair, the rule exists as a recognition that, having lost jurisdiction by issuing the remittitur, the appellate court relies on the trial court to make all orders necessary to carry out its judgment. Thus, while the remittitur re-vests the trial court with jurisdiction, that jurisdiction is limited. In this regard, the rule is different from the law-of-the-case doctrine, which is supple enough to bend when there has been an intervening change in the law.
In Ayyad, not only was the trial court jurisdictionally barred from entertaining Sprint’s arguments based on Concepcion, but Sprint arguably gave up its right to compel arbitration early on when it failed to move to compel before Discover Bank was decided and instead chose to allow the “litigation machinery” to grind on.
In this regard, Ayyad is simply a recognition of another settled appellate rule: If a party wants to raise an issue, it must do so in a timely fashion. Having made the tactical choice Sprint made here—to permit the litigation to go forward without seeking to compel arbitration—it could not count on a favorable change in the law to expand the remittitur’s scope later on.
In short, once the remittitur issues, a party risks being disconnected from potential avenues not included in the appellate court’s dispositional language. That’s a call no counsel wants to make.
A version of this article appeared in the San Francisco and Los Angeles Daily Journal, December 5, 2012.