Carolina Beverage Corp. v. Fiji Water Company LLC (2024) 102 Cal.App.5th 977. This is a reprint and update of an earlier opinion first issued on May 30, 2024. This is a case in which a distributor brought an action against the manufacturer for constructively terminating the distributor’s contract by selling products to retailers directly within the distributor’s territory. The Court found that after trial the distributor was unable to prove its case because the agreement provided four specific ways in which the contract could be terminated, and none of them were based upon the constructive termination of the agreement as a result of a substantial breach of its provisions. Additionally, the agreement allowed the manufacturer to under certain circumstances make sales directly into the distributor’s territory and placed no cap on how much of the distributor’s territory could be invaded in that way. The Court further held that even if constructive termination were available, the distributor did not treat the agreement as having been terminated because it continued to distribute the manufacturer’s products after the manufacturer was accused of constructively terminating the agreement.

Keeton v. Tesla Inc. (2024) 103 Cal.App.5th 26. In this case Tesla failed to pay arbitration fees within the 30 day time limit for an employment related case as required by CCP §  1281.98 (a)(1). The Court held that even though the payment was only a few days late, the time limit had to be strictly construed. The Court further noted that the Federal Arbitration Act had no preemptive effect because requiring timely payment of arbitration fees furthers the Federal policy to ensure enforceability of arbitration agreements according to their terms. Although the parties did not expressly incorporate the California Arbitration Act, the procedural provisions of the California Arbitration Act apply in California Courts by default.

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