Cookies Retail v. Cookies Creative Consulting & Promotions CA1/5 filed 6/23/26

Filed 6/23/26 Cookies Retail v. Cookies Creative Consulting & Promotions CA1/5
NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FIVE

COOKIES RETAIL, LLC,
Plaintiff and Appellant,
v.
COOKIES CREATIVE CONSULTING & PROMOTIONS, INC.,
Defendant and Respondent.

A174519

(City & County of SanFrancisco
Super. Ct. No. CGC-24-620457)

Plaintiff Cookies Retail, LLC (CRE) appeals from the judgment entered after the trial court denied its motion to vacate an arbitration award and granted defendant Cookies Creative Consulting & Promotions, Inc.’s (Cookies) petition to confirm the award.CRE contends that under Code of Civil Procedure section 1286.2:(1) the arbitrator exceeded his authority by making an alter ego finding; (2) Cookies engaged in witness tampering that resulted in an arbitration award procured by fraud or corruption; and (3) the arbitrator’s refusal to postpone the arbitrationhearing and his evidentiary rulings caused substantial prejudice to CRE.Given thelimits on judicial review of arbitration awards and finding no error, we affirm.
I. BACKGROUND
Cookies is the owner and/or exclusive licensor of the cannabis-related brand “Cookies” and other related intellectual property. Cookies licenses that intellectual property “in exchange for monetary consideration and other terms.”
CRE is a joint venture formed to identify and pursue opportunities for new Cookies-branded retail stores that would be operated by third parties subject to a written retail licensing agreement. Cookies is a minority owner of CRE. Brandon Johnson, Ryan Johnson, and Daniel Firtel are the majority owners.
Beginning September 16, 2019, Cookies and CRE entered into a joint venture through multiple agreements. One of the agreements, titled “Master Rollup Agreement” (Rollup Agreement),included an arbitration clause. That clause provided that any dispute between Cookies and CRE “arising out of or in any way related to” the Rollup Agreement would be subject to final and binding arbitration administered by JAMS (Judicial Arbitration and Mediation Services) pursuant to the JAMS Streamlined Arbitration Rules and Procedures. The clause furtherstated that “[a]ny arbitration must be on an individualbasis and the parties and the arbitrator will have no authority or powerto proceed with any claim as a class action or otherwise to join or consolidate any claim with any other claim or any other proceeding involving third parties.”(Italics added.)
Under another written agreement, titled “License Agreement,” Cookies allowed CRE to use Cookies’ intellectual property but “solely in connection with the advertising, publicity or promotion of the Licensee Business in furtherance of the Licensor Retail Strategy.”“Licensee Business” referred to the identification of opportunities for retail stores referenced in the Rollup Agreement, and “Licensor Retail Strategy” referred to the joint venture’s business strategy of granting licenses to third party operators of those stores pursuant to a written agreement. The License Agreement also contains an arbitration clause with language virtually identical to the language of the arbitration clause in the Rollup Agreement.
Under the joint venture agreements, Cookies expected to“share in the appreciation in value of their joint venture entity.”But this changed in late 2021 whenthe Johnsons and Firtel created TRP Partners, LLC (TRP).According to Cookies,CRE and TRP raised money from investors solely for TRP and its affiliates using Cookies’ intellectual property, to the detriment of Cookies.
Over the course of the parties’business relationship, disputes arose. After the parties were unable to resolve their disputes themselves, Cookies filed a demand for arbitration in January 2024. Cookies allegedexpress and implied contractual claims based on CRE’s failure to pay license fees owed under the joint venture agreements, CRE’s unauthorized uses of Cookies’ intellectualproperty to aid TRP’s fundraising, and CRE’s false claims that Cookies breached one of the parties’ agreements or made unreasonable demands “in an effort to, among other things, seek and obtain unfounded concessions....”
That same month, CRE filed a complaint in Orange County Superior Court, which was transferred to San Francisco County Superior Court and ultimatelyadded to the arbitration over CRE’s objections. CRE thereafter responded to Cookies’ claims and submitted counterclaims in the arbitration. In its counterclaims, CRE asserted: (1) claims that Cookies unlawfully operatedand sold a franchise and that CRE was a franchisee; (2)fraud claims based on Cookies’ misrepresentations and concealment of its status as a licensor; (3) a claim for violation of the Unfair Competition Law (Bus. & Prof. Code, §17200 et seq.);and (4) claims for breach of express and implied contract based on Cookies’ opening of a store in New York City’s Herald Squareand its agreement with another company to operate a “Cookies-branded marijuana dispensary at the Herald Square Store.” CRE also sought toenjoin Cookies’ business activities in New York under the Cookies brand and declaratory relief regarding the parties’ rights in the New York market under the joint venture agreements.
For damages, Cookies sought: (1) $8 million in unpaid license fees; (2) $20.4 million for licensing fees lost due to CRE’s squatting in markets to which CRE had exclusive rights; (3) $90 to $100 million forCRE’s unlicensed useof Cookies’ intellectual property to raise funds for TRP, a CRE-affiliate; and (4) $12.6 million for the resulting impairment of Cookies’ ability to raise capital itself. In the alternative, Cookies sought a finding that TRP is CRE’s alter ego and that alter ego liability for TRP’s conduct attaches to CRE. Finally, Cookies asked for an order requiring that CRE and its counselreturn all records obtained from Freddy Cameron,Cookies’ former Senior Director of Retail Operations.
Meanwhile, CRE asked the arbitrator to find that: (1) an inadvertent franchise was created, entitling CRE to rescind its joint venture with Cookies and recover damages; (2) CRE owed no licensing fees to Cookies or, if CRE was required to pay those fees, it was entitled to a refund; (3) TRP properly used Cookies’ intellectual property to raise money from investors because TRP is CRE’s affiliate; and (4) Cookies fraudulently induced CRE to enter into the joint venture. CRE sought damages in the amount of $173,824,254,as well as punitive damages.
On July 18, 2024, the arbitrator held a scheduling conferenceand applied the JAMS Streamlined Arbitration Rules and Procedurespursuant to the arbitration clause. Following another conference in September,the arbitrator denied CRE’s request to continue the arbitration hearing. He also issued a number of subpoenas requested by CRE, including oneto Cameron. When Cameron left Cookies and unbeknownst to Cookies, he allegedly took “voluminous data.” In the final arbitration award, the arbitrator found:“CRE’s counsel telephoned Freddy Cameron within minutes of his posting on LinkedIn that he had left Cookies. CRE’s counsel had Freddy Cameron accept what ostensibly was a statutory ‘records subpoena’ for his data trove that (according to the documentation) was supposed to go to Array in Irvine, but which CRE’s counsel redirected to Intrepid in San Diego. That data was never treated as being subject to a ‘records subpoena.’”
The arbitration hearing began on September 26, 2024, and ended on October 16. Before the hearing, the arbitratorordered Cookies to produceall non-privileged records taken by Cameron (Cameron documents), subject to an order of return after the hearing. In producing those documents, Cookies labeled them as “STOLEN.” “[T]here was no ruling precluding” the use of the Cameron documents during the arbitration hearing, and CRE did, in fact, use some of those documentsat the hearing.
On June 2, 2025, the arbitrator issued a detailed, 75-page final award. As relevant here, the arbitrator made a number of findings.
First, the arbitrator found that CRE owed Cookies unpaid license fees under the joint venture agreements.
Second, the arbitrator found that CRE misused Cookies’ intellectual property. According to the arbitrator,neither CRE nor TRPhad the right to use that intellectual property for fundraising under any agreement. In the alternative, the arbitrator found that TRP was CRE’s alter ego and that CRE was therefore liable for TRP’s conduct. The arbitrator noted: “While CRE asserts that TRP did not agree to be bound by an arbitration clause, that argument fundamentally fails to understand that the Arbitrator is neither suggesting nor ruling that TRP is bound by this award. ...By contrast, CRE is a party to this arbitration.” The arbitrator thereafter awarded Cookies $10 million dollars “for the improper use of the Cookies’ marks in CRE/TRP’s fundraising.”
Third, the arbitrator found against CRE as to allof its counterclaims.
Finally, the arbitrator ordered CRE to return the Cameron documentsto Cookies because “[a]llowing a litigant to retain stolen documents would serve to encourage, rather than discourage, the conduct of wrongdoers.” In total, the arbitrator awarded Cookies $17,893,394 in damages and $4,864,329.60 in fees, costs, and disbursements.
CRE moved to vacate the arbitration award and Cookies petitioned to confirm the award. The trial court denied CRE’s motion and granted Cookies’ petition.
Citingthe “extremely narrow” grounds for vacating an arbitration award,the trial court held that the arbitrator did not exceed his authority because TRP was not a party to the arbitration or bound by the award. It also held that CRE was not prejudiced because the alter ego ruling was an alternative basis for liability.
The trial courtfurther reasonedthat the arbitrator’s finding of no witness tampering was supported by the record as“it was Mr. Cameron’s own conduct in taking Cookies’ documents that exposed him to criminal sanctions. [Citation.]The arbitrator allowed Cameron to testify, but he failed to appear.”
Thetrial court also rejected CRE’s arguments challenging the arbitrator’s refusal to continue the hearing because CRE did“not cogently explain how the scheduling and Cookies’ document production substantially prejudiced it or how the outcome would have been different.”
Finally, as toCRE’sevidentiary challenges, the trial court held that “[t]o the extent CRE raises a cognizable claim to vacate and is not merely challenging the arbitrator’s factual findings contrary to Moncharsh [v. Heily & Blase (1992) 3 Cal.4th 1 (Moncharsh)], the argument fails. Each party had an opportunity to present its case and as noted, CRE’s resistance to participation exacerbated any scheduling difficulties. CRE was even able to use documents stolen from Cookies.”
After entering its orders on the competing motions, the trial court entered judgmentand CRE timely appealed.
II. DISCUSSION
Standard of Review
Although we review an order confirmingan arbitration award de novo (Bacall v. Shumway (2021) 61 Cal.App.5th 950, 957),we are also bound by the well-established limits on judicial review of an arbitration award.“Public policy supports minimal judicial participation in arbitration proceedings.” (Evans v. Centerstone Development Co.(2005) 134 Cal.App.4th 151, 157 (Evans).) This is because “arbitral finality is a core component of the parties’ agreement to submit to arbitration.” (Moncharsh, supra,3 Cal.4th at p. 10.)
As a result, we, as a general rule, “may not review an arbitrator’s decision for errors of fact or law” and must accept the arbitrator’s findings as correct. (Cotchett, Pitre & McCarthy v. Universal Paragon Corp. (2010) 187 Cal.App.4th 1405, 1416.) Indeed, we must “draw[] all reasonable inferences to support the [arbitrator’s] decision and ‘display[ ] substantial deference towards the arbitrator’s determination of his or her contractual authority.’” (Evans, supra, 134 Cal.App.4th at p. 157, quoting Jones v. Humanscale Corp. (2005) 130 Cal.App.4th 401, 408.)“[B]y voluntarily submitting to arbitration, the parties have agreed to bear [the] risk [an arbitrator will err] in return for a quick, inexpensive, and conclusive resolution to their dispute.” (Moncharsh, supra, 3Cal.4th at p.11.) Consistent with these overarching principles, section 1286.2sets forth the“exclusive grounds” on which we may vacate an arbitration award. (Soni v. SimpleLayers, Inc. (2019) 42 Cal.App.5th 1071, 1085.)
Challenge Under Section 1286.2, Subdivision (a)(4)
Under section 1286.2, subdivision (a)(4), we may vacate an arbitration award if the arbitrator exceeds his or her powers “and the award cannot be corrected without affecting the merits of the decision upon the controversy submitted.” CRE argues that the arbitrator in this case exceeded his powers by finding that TRP was CRE’s alter egoeven thoughthe arbitration clause prohibited TRP from participating in the arbitration. CRE further argues that the arbitrator exceeded his authority by using his alter ego finding to award an additional $10 million against CRE. We are not persuaded.
As an initial matter, it appears that CRE forfeited any challenge to the arbitrator’s authority to make the alter ego finding. “In order to challenge an award in court, a litigant must have raised the point before the arbitrator.” (Comerica Bank v. Howsam (2012) 208 Cal.App.4th 790, 829 (Comerica).) In its post-arbitration brief, Cookies asked the arbitrator to find that TRP was CRE’s alter ego. But aside from addressing the merits of Cookies’ argument, CREonly challenged the arbitrator’s authority to enter a judgment against TRP. Itdid notquestion the arbitrator’s authority to make an alter ego finding as a basis for finding CRE liable.
In any event, even if CRE did not forfeit the issue, we would find that the arbitrator did not exceed his authority.
First, CRE apparently misstates the language of the arbitration clause. In both its opening brief and reply, CRE appears to quote from that clause when it states that “the parties expressly agreed that ...‘the arbitrator will have no authority or power to proceed with any other claim or any other proceeding involving third parties.’” But the clause actually states in relevant part that “the arbitrator will have no authority or power ... to join or consolidate any claim with any other claim or any other proceeding involving third parties.” (Italics added.) Here, the arbitrator did not join or consolidate Cookies’ arbitrable claims against CRE with any otherclaim or proceeding involving TRP. Indeed, the arbitrator made it expressly clear that his award was not “an award against TRP” or any other “non-party to the arbitration.” Thus, the arbitrator did not exceed his authority by finding that CRE, a party to the arbitration, could be held liable for the actions of TRP because TRP was CRE’s alter ago. Andto the extent that the language of the arbitration clause is ambiguous, we must defer to the arbitrator’s determination of his authority under that clause. (See Evans, supra, 134 Cal.App.4th at p. 157.)
Benaroya v. Willis (2018) 23 Cal.App.5th 462 does not compel a contrary conclusion. In Benaroya, the arbitrator granted a motion for leave to amend the arbitration demand to add a nonsignatory to the arbitration agreementas a party. (Id. at pp. 465–466.) The arbitrator ultimately found that nonsignatory liable in the arbitration award. (Id.at pp. 466–467.) By contrast, TRP was never a party to the arbitration and the arbitrator never imposedany liability on TRP.
As to CRE’s contention that the arbitratorused the alter ego finding to “award an additional $10 million against CRE,” wereject itbased on theactual language of the final award.That award explains that the “very conservative”$10 million dollar award was based on CRE’s conduct, including its “funneling [of] Cookies Branded Retail Store financial results data to TRP with full knowledge that Cookies IP was being used to build that separate business.”We therefore see no basis for holding that the arbitrator exceeded his powers.
Challenge Under Section 1286.2, Subdivision (a)(1)
Under section 1286.2, subdivision (a)(1), we may vacate the arbitration award if it“was procured by corruption, fraud or other undue means.” CRE argues that the award was obtained by fraud and corruption because Cookies tampered with a potential witness, Cameron, who consequently refused to appear at the arbitration hearing.But CRE had ample opportunity “to discover and reveal” this alleged fraud and corruption “at the arbitration hearing.” (Pour Le Bebe, Inc. v. Guess? Inc. (2003) 112 Cal.App.4th 810, 833 [considering the appellants’ claim that award was procured by undue means even though arbitrators had rejected that claim solely because the appellants “‘never had an opportunity to prosecute a full-blown claim for breach of duty of loyalty’”].) Indeed, CRE does not argue that it was prevented from presenting any evidence of witness tampering at the arbitration hearing. Instead, it simply disagrees with the arbitrator’s conclusion that no tampering occurred based on the evidence it did present. On a petition to vacate an arbitration award, CREcannot relitigate anissuethat has been fully litigated at the arbitration hearing. (See Starr v. Mayhew (2022) 83 Cal.App.5th 842, 857 [declining to vacate award under section 1286.2, subdivision (a)(1) because the appellant “fully addressed” the issue at the arbitration hearing].)
Finally, even if CRE was entitled to a second bite of the apple on its claim of witness tampering, we would reject it because CRE failed to show that it was “prejudiced.” (Comerica, supra,208 Cal.App.4th at p. 826.) Although CRE claims that Cameron’s testimony would have supported its position, his declaration in the arbitration was conclusory and is not sufficient to establishprejudice. Indeed, CRE concedes thatCameron’s “declarations were almost entirely limited to describing acts of intimidation and witness tampering.” Accordingly, we find no grounds for vacating the arbitration award under section 1286.2, subdivision (a)(1).
Challenges Under Section 1286.2, Subdivision (a)(5)
Under section 1286.2, subdivision (a)(5), we may vacate an arbitration award if “[t]he rights of the party were substantially prejudiced by the refusal of the arbitrators to postpone the hearing upon sufficient cause being shown therefor or by the refusal of the arbitrators to hear evidence material to the controversy or by other conduct of the arbitrators contrary to the provisions of this title.” In seeking to vacate the award under this subdivision, CRE points to the arbitrator’s refusal to postpone the arbitration hearingand his refusal to consider CRE’s evidence while at the same time considering Cookies’ “improper evidence.”Neither refusal,however, supports vacating the award.
Refusal to Postpone the Arbitration Hearing
In reviewing a challenge to the arbitrator’s refusal to postpone the arbitration hearing, courts engage in a two-step analysis. “First, the trial court must determine whether the arbitrator abused his or her discretion by refusing to postpone the hearing upon sufficient cause being shown. Second, if there was an abuse of discretion, the trial court must determine whether the moving party suffered substantial prejudice as a result.” (SWAB Financial, LLC v. E*Trade Securities, LLC (2007) 150 Cal.App.4th 1181, 1198.)
CRE argues it was prejudiced because the arbitration hearing began only 71 days after the initial scheduling conference. According to CRE, Cookies used the “compressed schedule as a weapon, preventing CRE from having an adequate opportunity to obtain, review, and present evidence in support of its claims and defenses.” We are not persuaded. As the trial court observed, “the parties’ arbitration contract specified JAMS arbitration under its Streamlined Arbitration Rules and Procedures.” And CRE does not contend that the arbitrator violated those rules and procedures. We therefore agree with the court that CRE is, in effect, asking us to findthat the arbitrator abused his direction by applying the rules under which CRE agreed to arbitrate.
Even if the arbitrator should have continued the arbitration hearing, we wouldstill reject CRE’s claim for lack of prejudice. CRE contends it was prejudiced because: (1) Cookies objected to and prevented third parties from producing documents to CRE; (2) Cookies produced 40,000 documents only 27 days before the arbitration hearing; (3) Cookies produced “only a handful of documents” related to one Cookies-branded retail store at issue in the arbitration; and (4) 13 days before the arbitration hearing, Cookies threatened Cameron and his employer with criminal prosecution if he participated in the arbitration hearing. In the final award, the arbitrator expressly rejected all of these claims of prejudice. For example, the arbitrator stated that he “has not perceived that [CRE] has been limited in any way in their development of their presentation of their case, or in their ability to participate fully in these proceedings.” With respect to Cameron, the arbitrator considered and rejected CRE’s claim of witness tampering. Moreover, the arbitrator did not find Cameron’s declarations “helpful to the assessment of the merits of the case.” Because we must defer to these findings (Evans, supra, 134 Cal.App.4th at p. 157), we find no prejudice.
Evidentiary Rulings
In its final challenge to the award, CREcontends that “the arbitrator simultaneously refused to allow CRE to obtain material evidence while allowing Cookies to use impermissible evidence.” Specifically, CRE challenges various evidentiary rulings the arbitrator made. But “challenges to the arbitrator’s rulings on discovery, admission of evidence, reasoning, and conduct of the proceedings do not lie.” (Evans, supra, 134 Cal.App.4th at p. 167.)As the trial court correctly found, “[e]ach party had an opportunity to present its case ....” We therefore find no error.
III. DISPOSITION
The trial court’s judgment is affirmed. Cookies is entitled to recoverits costs on appeal.

CHOU, J.

WE CONCUR.

SIMONS, Acting P. J.
BURNS, J.

A174519/ Cookies Retail v. Cookies Creative