In Flores v. West Covina Auto Group, — Cal.Rptr.3d —-, 2013 WL 139200 (Cal.App. 2 Dist. Jan. 11, 2013), the California Court of Appeal extended the U.S. Supreme Court’s landmark decision in AT&T Mobility, Inc. v. Concepcion, 131 S. Ct. 1740 (2011) by holding that the Federal Arbitration Act preempts any right to a class action under the California Consumers Legal Remedies Act (“CLRA”), and class action waivers in arbitration agreements governed by the FAA are therefore enforceable.
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Another California Court of Appeal Rules That Concepcion Discredits Gentry’s Rule Invalidating Most Class Action Waivers In Arbitration Provisions
On August 13, 2012, another California Court of Appeal recognized that Gentry v. Superior Court, 42 Cal.4th 443 (2007) has been “discredited” by the U.S. Supreme Court’s expansive landmark decision in AT&T Mobility, Inc. v. Concepcion, 131 S. Ct. 1740 (2011) holding the Federal Arbitration Act preempts state laws refusing to enforce arbitration agreements with class action waivers. See Truly Nolen of America v. Superior Court, D060519, 2012 Cal. App. LEXIS 871 (2012). Gentry, a pre-Concepcion opinion, established a rule effectively invalidating most class action waivers contained in arbitration provisions based on certain state statutory rights. The Truly Nolen decision expressly joined the emerging “majority view” in recognizing that the FAA preempts Gentry, “Based on Concepcion’s expansive language and its clear mandate that arbitration agreements must be enforced according to their terms despite a state’s policy reasons to the contrary.”
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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 Broughton v. Cigna Healthplans of California, 21 Cal. 4th 1066 (1999), and Cruz v. Pacificare Health Systems, Inc., 30 Cal. 4th 303 (2003), the Ninth Circuit unanimously held that “the Broughton-Cruz rule does not survive” the United States Supreme Court decision in AT&T Mobility, Inc. v. Concepcion, 131 S. Ct. 1740 (2011) (FAA preempts California law refusing to enforce class action waivers in arbitration provisions).
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California Court of Appeal Holds Defendant Did Not Waive Its Right To Compel Arbitration By Waiting Until After Class Certification Where Other Class Members–But Not Plaintiff–Had Agreed To Arbitrate
In Sky Sports, Inc. v. Superior Court, (2nd Dist., Div. 3, Dec. 15, 2011) Case No. B233820, the California Court of Appeal held that a defendant does not waive its right to compel arbitration of a class action by waiting to file a motion to compel arbitration until the class has been certified, where some of the class members, but not the class representative, signed arbitration agreements with defendant.
Continue Reading California Court of Appeal Holds Defendant Did Not Waive Its Right To Compel Arbitration By Waiting Until After Class Certification Where Other Class Members–But Not Plaintiff–Had Agreed To Arbitrate
The California Court Of Appeal Disagrees With The U.S. Supreme Court On The Enforceability Of Arbitration Agreements
In Sanchez v. Valencia Holding Company, LLC, — Cal.Rptr.3d —-, 2011 WL 5027488 (Cal.App. 2 Dist. Oct. 24, 2011), the California Court of Appeal attempts an end run around the U.S. Supreme Court’s recent decision in AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740 (2011). In Concepcion, the Supreme Court found that the Federal Arbitration Act (the “FAA”) preempts state efforts to invalidate or re-write arbitration agreements by applying rules that would not result in the invalidation of other contracts. “The principal purpose of the FAA is to ensure that private arbitration agreements are enforced according to their terms.” Id. at 1748. Specifically, the U.S. Supreme Court held that the FAA preempts state law restrictions on class action waivers in consumer arbitration agreements.
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Ninth Circuit Rules That The National Bank Act Preempts California’s Unfair Competition Law
On March 9, 2010, the Ninth Circuit held that the National Bank Act (“NBA”) preempts claims of “unfair” and “fraudulent” conduct in violation of state law. See Martinez v. Wells Fargo Home Mortgage, Inc., No. 07-17277 (9th Cir. March 9, 2010).
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