Category Archives: Arbitration

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The Consumer Financial Protection Bureau Adopts New Rule Barring Class Action Waivers in Arbitration Agreements

As expected, and with few changes, the Consumer Financial Protection Bureau adopted its proposed rule barring financial companies regulated by the agency from including class action waivers in arbitration agreements. Arbitration clauses in new contracts offering a consumer financial product or service will need to include specified language indicating that arbitration cannot be used to … Continue Reading

Dancing On Their Own: The California Supreme Court’s Decision in McGill v. Citibank, N.A. that Class Action Waivers Do Not Apply to Claims for Public Injunctive Relief under California’s Consumer Protection Laws

On April 6, 2017, the California Supreme Court struck another blow in its contentious battle with the United States Supreme Court on the enforceability of consumer arbitration clauses subject to the Federal Arbitration Act (FAA).  In McGill v. Citibank, N.A., No. S224086, Slip Op. at 1 (Cal. Apr. 6, 2017), the Court held that an … Continue Reading

U.S. Supreme Court Holds California Court of Appeal’s Interpretation of Arbitration Clause Preempted by FAA

In DirecTV v. Imburgia, No. 14-462, 2015 U.S. LEXIS 7999 (December 14, 2015) the United States Supreme Court reversed a California Court of Appeal decision interpreting, and invalidating, an arbitration clause containing a class arbitration waiver, holding that the Court of Appeal’s interpretation was preempted by the Federal Arbitration Act (the “FAA”).  The Court then … Continue Reading

The California Supreme Court Holds Consumer Class Action Waivers In Arbitration Provisions Are Enforceable Under Federal Law

On August 3, 2015, the California Supreme Court issued its long-awaited arbitration decision in Sanchez v. Valencia Holding Co., LLC, No. B228027.  The Court held that the arbitration provision found in a standard form auto finance and sales contract widely used by auto dealerships and lenders throughout California is not unconscionable.  Not surprisingly, the Court … Continue Reading

In Sprint Victory, Judge Posner and the Seventh Circuit Hold That Arbitration Is Required in a TCPA Class Action Even Though the Alleged Violation Occurred After the Termination of the Contract

On May 11, 2015, in an opinion written by Judge Posner, the Seventh Circuit reversed an order denying Sprint’s motion to compel arbitration in a class action allegation violations of the Telephone Consumer Protection Act (“TCPA”).  The thrust of the dispute was not whether there was a valid agreement to arbitrate between Sprint and the … Continue Reading

Federal Law Preempts State Law Barring Arbitration Of Claims For Public Injunction

On March 7, 2012, the Ninth Circuit held that the Federal Arbitration Act preempts California’s rule prohibiting the arbitration of claims for public injunctions. Kilgore v. KeyBank, Nat’l Ass’n, — F.3d —-, 2012 WL 718344, *10 (9th Cir. March 7, 2012). Referring to this as the “Broughton-Cruz rule,” after the California Supreme Court’s decisions in … Continue Reading

California Appellate Court Analyzes Employment Arbitration Agreement after Supreme Court’s AT&T Decision

On July 12, 2011, California’s Second Appellate District Court of Appeal issued a decision in Brown v. Ralphs Grocery Company regarding the enforceability of arbitration agreements in the employment context that limit employees’ rights to assert class and representative actions. This was the first published state court decision in California regarding employment arbitration agreements since the … Continue Reading

Discover Bank Is Dead: The U.S. Supreme Court Rules That Federal Law Preempts State Laws That Obstruct The Enforcement Of Class Action Waivers In Arbitration Agreements

On April 27, 2011, the Supreme Court held that the Federal Arbitration Act “preempts California’s rule classifying most collective arbitration waivers in consumer contracts as unconscionable.” AT&T v. Concepcion, 563 U.S. ____, majority at 5, 18 (2011). The Court referred to this rule as the “Discover Bank rule,” after the California Supreme Court’s decision in … Continue Reading

California Court of Appeal Holds Class Action Waiver in Commercial Contract Not Unconscionable

In Walnut Producers of California v. Diamond Foods, Inc., Case No. C060346 (August 16, 2010), the California Court of Appeal for the Third Appellate District held that a class arbitration waiver in an agreement between walnut producers and a walnut processor is not unconscionable. Plaintiffs include Walnut Producers of California, a nonprofit cooperative marketing association whose … Continue Reading
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