equal-treatment principle in California

2026(Hohenshelt, supra, 18 Cal.5th at p. 327.) The two concepts combined form “ ‘an equal-treatment principle: A court may invalidate an arbitration agreement based on “generally applicable contract defenses” like fraud or unconscionability, but not on legal rules that “apply only to 6 Specifically, the FAA applies in “any maritime transaction or a contract evidencing a transaction involving commerce.” ( 9 U.S.C. § 2 .) The phrase “involving commerce” in section 2 of the FAA is broader than merely people and activities within the flow of interstate commerce; it extends the FAA’s reach to the full

2026(Hohenshelt, supra, 18 Cal.5th at p. 327.) The two concepts combined form “ ‘an equal-treatment principle: A court may invalidate an arbitration agreement based on “generally applicable contract defenses” like fraud or unconscionability, but not on legal rules that “apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue.” ’ ” (Viking River Cruises, Inc. v. Moriana (2022) 596 U.S. 639, 650 .) The FAA does not bestow arbitration agreements with special status; it simply ensures arbitration agreements are as enforceable as other contracts.

2025The United States Supreme Court has repeatedly explained that section 2 of the FAA ( 9 U.S.C. § 2 ) “establishes an equal-treatment principle: A court may invalidate an arbitration agreement based on ‘generally applicable contract defenses’ like fraud or unconscionability, but not on legal rules that ‘apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue.’ ” (Kindred, supra, 581 U.S. at p. 251 , quoting AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333 , 339 (Concepcion).) “[C]ourts must place arbitration agreements on an equal footin

2022The FAA also preempts facially neutral state-law rules that “disfavor arbitration as applied by imposing procedural requirements that ‘interfere[ ] with fundamental attributes of arbitration,’ especially its ‘ “lower costs, greater efficiency and speed, and the ability to choose expert adjudicators to resolve specialized disputes.” [Citation.]’ [Citation.]” (Sonic-Calabasas A, Inc. v. Moreno (2013) 57 Cal.4th 1109, 1143 (Sonic), quoting AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333 , 344, 348 (Concepcion).) Defendant argues section 1281.97 violates the FAA’s equal-treatment principle bec

2022The FAA also preempts facially neutral state-law rules that “disfavor arbitration as applied by imposing procedural requirements that ‘interfere[ ] with fundamental attributes of arbitration,’ especially its ‘ “lower costs, greater efficiency and speed, and the ability to choose expert adjudicators to resolve specialized disputes.” [Citation.]’ [Citation.]” (Sonic-Calabasas A, Inc. v. Moreno (2013) 57 Cal.4th 1109, 1143 (Sonic), quoting AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333 , 344, 348 (Concepcion).) Defendant argues section 1281.97 violates the FAA’s equal-treatment principle bec

2019Partnership v. Clark (2017) --- U.S. ----, [ 137 S.Ct. 1421 , 1426], 197 L.Ed.2d 806 ( Kindred Nursing ).) As this court has explained, this equal treatment principle mandates that our unconscionability standard "be ... the **722 same for arbitration and nonarbitration agreements" ( Sanchez , supra , 61 Cal.4th at p. 912 , 190 Cal.Rptr.3d 812 , 353 P.3d 741 ) and that we enforce our unconscionability rules "evenhandedly" ( Sonic II , supra , 57 Cal.4th at p. 1143 , 163 Cal.Rptr.3d 269 , 311 P.3d 184 ).

2026(Hohenshelt, supra, 18 Cal.5th at p. 327.) The two concepts combined form “ ‘an equal-treatment principle: A court may invalidate an arbitration agreement based on “generally applicable contract defenses” like fraud or unconscionability, but not on legal rules that “apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue.” ’ ” (Viking River Cruises, Inc. v. Moriana (2022) 596 U.S. 639, 650 .) The FAA does not bestow arbitration agreements with special status; it simply ensures arbitration agreements are as enforceable as other contracts.

2025First, the “enforcement mandate” sets out a general rule that “renders agreements to arbitrate enforceable as a matter of federal law.” (Viking River, supra, 596 U.S. at p. 650 .) Second, as an exception to that rule, the “saving clause . . . permits invalidation of arbitration clauses on grounds applicable to ‘any contract.’ ” (Ibid.) Together, the enforcement mandate and saving clause “establish ‘an equal-treatment principle: A court may invalidate an arbitration agreement based on “generally applicable contract defenses” like fraud or unconscionability, but not on legal rules that “apply on

2025The FAA “requires courts to place arbitration agreements ‘on equal footing with all other contracts.’ ” (Kindred Nursing Centers L.P. v. Clark (2017) 581 U.S. 246, 248 .) Under this equal treatment principle, “a court can invalidate an arbitration agreement based on ‘ “generally applicable contract defenses,” ’ it cannot do so based on state rules that ‘ “apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue.” ’ (Kindred Nursing Centers L.P. v. Clark[, supra,] 581 U.S. 246, 251 . . . .)” (Keeton, supra, 103 Cal.App.5th at p. 34.) “Like

2025The United States Supreme Court has repeatedly explained that section 2 of the FAA ( 9 U.S.C. § 2 ) “establishes an equal-treatment principle: A court may invalidate an arbitration agreement based on ‘generally applicable contract defenses’ like fraud or unconscionability, but not on legal rules that ‘apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue.’ ” (Kindred, supra, 581 U.S. at p. 251 , quoting AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333 , 339 (Concepcion).) “[C]ourts must place arbitration agreements on an equal footin

2019It preempts any rule of unconscionability that "discriminat[es] on its face against arbitration." ( Kindred Nursing , at p. 1426.) *764 But the equal treatment principle extends beyond overt discrimination, "displac[ing] any [state] rule [of unconscionability] that covertly accomplishes the same objective" ( Kindred Nursing , supra , --- U.S. ---- [ 137 S.Ct. at p. 1426 ] ) or that employs "more subtle methods" to "target arbitration" ( Epic Systems Corp. v. Lewis (2018) --- U.S. ----, [ 138 S.Ct. 1612 , 1622], 200 L.Ed.2d 889 ( Epic )).

2019It preempts any rule of unconscionability that "discriminat[es] on its face against arbitration." ( Kindred Nursing , at p. 1426.) *764 But the equal treatment principle extends beyond overt discrimination, "displac[ing] any [state] rule [of unconscionability] that covertly accomplishes the same objective" ( Kindred Nursing , supra , --- U.S. ---- [ 137 S.Ct. at p. 1426 ] ) or that employs "more subtle methods" to "target arbitration" ( Epic Systems Corp. v. Lewis (2018) --- U.S. ----, [ 138 S.Ct. 1612 , 1622], 200 L.Ed.2d 889 ( Epic )).

2025Partnership v. Clark (2017) 581 U.S. 246 , 251; accord, Viking River Cruises, Inc. v. Moriana, supra, 596 U.S. at p. 650 .) The FAA also preempts “any rule that covertly accomplishes the same objective by disfavoring contracts that . . . have the defining features of arbitration agreements.” (Kindred Nursing, supra, 581 U.S. at p. 251; accord, Sonic-Calabasas A, Inc. v. Moreno (2013) 57 Cal.4th 1109, 1143 [the FAA preempts facially neutral state law rules that “disfavor arbitration as applied by imposing procedural requirements that ‘interfere[] with fundamental attributes of arbitration,’ esp

2025Partnership v. Clark (2017) 581 U.S. 246 , 251; accord, Viking River Cruises, Inc. v. Moriana, supra, 596 U.S. at p. 650 .) The FAA also preempts “any rule that covertly accomplishes the same objective by disfavoring contracts that . . . have the defining features of arbitration agreements.” (Kindred Nursing, supra, 581 U.S. at p. 251; accord, Sonic-Calabasas A, Inc. v. Moreno (2013) 57 Cal.4th 1109, 1143 [the FAA preempts facially neutral state law rules that “disfavor arbitration as applied by imposing procedural requirements that ‘interfere[] with fundamental attributes of arbitration,’ esp

2025(See Hernandez v. Sohnen Enterprises, Inc. (2024) 102 Cal.App.5th 222 , 240 [“[I]f the 4 HOHENSHELT v. SUPERIOR COURT Groban, J., concurring parties have agreed to apply” a provision of the CAA, “no discussion of preemption is required”].) The equal treatment principle comes into play only when state statutory or case law renders an arbitration agreement invalid, revocable, or unenforceable.

2024Lexis 164786, *2 [same].) The Second District also recently issued Hernandez v. Sohnen Enterprises, Inc. (2024) 102 Cal.App.5th 222 (Hernandez), in which the court agreed with Belyea that section 1281.97 violates the FAA’s equal treatment principle “because it mandates findings of material breach and waiver for late payment that do not apply generally to all contracts,” which makes it “harder to enforce arbitration agreements” in consumer and employment contracts.

2019To begin with, "[a] court may not ... construe [an arbitration] agreement in a manner different from that in which it otherwise construes nonarbitration agreements under state law." ( Perry v. Thomas (1987) 482 U.S. 483 , 493, fn. 9, 107 S.Ct. 2520 , 96 L.Ed.2d 426 ( Perry ).) Nor may a court apply the unconscionability doctrine "in a fashion that disfavors arbitration" or " 'rely on the uniqueness of an agreement to arbitrate as a basis for a state-law holding that enforcement would be unconscionable.' " ( Concepcion , supra , 563 U.S. at p. 341, 131 S.Ct. 1740 .) In short, the saving clause

2019To begin with, "[a] court may not ... construe [an arbitration] agreement in a manner different from that in which it otherwise construes nonarbitration agreements under state law." ( Perry v. Thomas (1987) 482 U.S. 483 , 493, fn. 9, 107 S.Ct. 2520 , 96 L.Ed.2d 426 ( Perry ).) Nor may a court apply the unconscionability doctrine "in a fashion that disfavors arbitration" or " 'rely on the uniqueness of an agreement to arbitrate as a basis for a state-law holding that enforcement would be unconscionable.' " ( Concepcion , supra , 563 U.S. at p. 341, 131 S.Ct. 1740 .) In short, the saving clause

2019Thus, as this court has explained, the FAA "preempts even a 'generally applicable' state law contract defense if that defense (1) is 'applied in a fashion that disfavors arbitration' [citation], or (2) 'interferes with fundamental attributes of arbitration' [citation], such as ' "lower costs, greater efficiency and speed, and the ability to choose expert *170 adjudicators to resolve specialized disputes." ' " ( McGill v. Citibank , N.A. (2017) 2 Cal.5th 945 , 964, 216 Cal.Rptr.3d 627 , 393 P.3d 85 ( McGill ).) In other words, although the FAA's "saving clause preserves generally applicable con

2019Thus, as this court has explained, the FAA "preempts even a 'generally applicable' state law contract defense if that defense (1) is 'applied in a fashion that disfavors arbitration' [citation], or (2) 'interferes with fundamental attributes of arbitration' [citation], such as ' "lower costs, greater efficiency and speed, and the ability to choose expert *170 adjudicators to resolve specialized disputes." ' " ( McGill v. Citibank , N.A. (2017) 2 Cal.5th 945 , 964, 216 Cal.Rptr.3d 627 , 393 P.3d 85 ( McGill ).) In other words, although the FAA's "saving clause preserves generally applicable con

2026(Cronus Investments, Inc. v. Concierge Services (2005) 35 Cal.4th 376, 384 (Cronus).) The substantive federal arbitration law contained in section 2 of the FAA applies to any arbitration agreement within the scope of the FAA, whether in federal or state court.

2025The FAA does apply, but not exclusively to the extent state law is not inconsistent therewith. 14 state law attempts to regulate conduct in a field that Congress intended the federal law exclusively to occupy; and (3) conflict preemption, where it is impossible to comply with both state and federal requirements, or where state law stands as an obstacle to the accomplishment and execution of the full purpose and objective of Congress.’ ” (Keeton, supra, 103 Cal.App.5th at p. 34.) Federal preemption presents a pure question of law that we review de novo.

2025The FAA “requires courts to place arbitration agreements ‘on equal footing with all other contracts.’ ” (Kindred Nursing Centers L.P. v. Clark (2017) 581 U.S. 246, 248 .) Under this equal treatment principle, “a court can invalidate an arbitration agreement based on ‘ “generally applicable contract defenses,” ’ it cannot do so based on state rules that ‘ “apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue.” ’ (Kindred Nursing Centers L.P. v. Clark[, supra,] 581 U.S. 246, 251 . . . .)” (Keeton, supra, 103 Cal.App.5th at p. 34.) “Like

2025(See Brown, supra, 430 F.3d at p. 1012; Quach, supra, 16 Cal.5th at pp. 569, 573-574.) But as we recently held, consistent with the high court’s decision in Morgan, supra, 596 U.S. 411, 418 , the unique prejudice requirement for arbitral waivers cannot be squared with the FAA’s equal-treatment principle.