class arbitration waiver in California

2015CHIN, J., Concurring and Dissenting. — I agree with the majority that, under the high court’s decision in AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333 [ 179 L.Ed.2d 742 , 131 S.Ct. 1740 ] (Concepcion), the Federal Arbitration Act (FAA) ( 9 U.S.C. § 1 et seq.) requires enforcement of the class arbitration waiver in the contract between plaintiff Gil Sanchez and defendant Valencia Holding Company, LLC (Valencia).

2015CHIN, J., Concurring and Dissenting. — I agree with the majority that, under the high court’s decision in AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333 [ 179 L.Ed.2d 742 , 131 S.Ct. 1740 ] (Concepcion), the Federal Arbitration Act (FAA) ( 9 U.S.C. § 1 et seq.) requires enforcement of the class arbitration waiver in the contract between plaintiff Gil Sanchez and defendant Valencia Holding Company, LLC (Valencia).

2026It concluded that Betanco had failed to show that the class-arbitration waiver was unenforceable under Gentry v. Superior Court (2007) 42 Cal.4th 443 and thus declined to strike the class waiver from the arbitration agreement.

2026In particular, Gentry concluded “[t]he presence of a class arbitration waiver in an employee arbitration agreement . . . does not by itself ‘indicate a systematic effort to impose arbitration on an employee not simply as an alternative to litigation, but as an inferior forum that works to the employer’s advantage.’ ” (Gentry, supra, 42 Cal.4th at p. 466 .) Gentry further noted that “severance is particularly appropriate in the case of class arbitration waivers” as distinguished from “limitations on remedies or other limitations that are invalid on their face.” (Ibid.) 12 10 To be clear, the tr

2017In Discover Bank v. Superior Court (2005) 36 Cal.4th 148 , 30 Cal.Rptr.3d 76 , 113 P.3d 1100 , the California Supreme Court addressed the validity of a class arbitration waiver.

2017In Discover Bank v. Superior Court (2005) 36 Cal.4th 148 , 30 Cal.Rptr.3d 76 , 113 P.3d 1100 , the California Supreme Court addressed the validity of a class arbitration waiver.

2009(See Gentry, supra, 42 Cal.4th at p. 467 [“the validity of a class arbitration waiver was analyzed in the previous part of this opinion in terms of unwaivable statutory rights rather than unconscionability”].) Armendariz, supra, 24 Cal.4th 83 , addressed some of the other bases for unconscionability asserted here.

2009(Armendariz, supra, 24 Cal.4th at p. 114 .) “Section 1670.5 is based upon Uniform Commercial Code section 2-302, but expands coverage to include noncommercial contracts.” (Perdue v. Crocker National Bank (1985) 38 Cal.3d 913, 925, fn. 10 [ 216 Cal.Rptr. 345 , 702 P.2d 503 ].) 9 Discover Bank concluded that the class arbitration waiver, provided as a “ ‘bill staffer’ ” amending the cardholder agreement, was procedurally unconscionable because the cardholder was deemed to accept the amendment if he or she did not close the account.

2011If it concludes, based on these factors, that a class arbitration is likely to be a significantly more effective practical means of vindicating the rights of the affected employees than individual litigation or arbitration, and finds that the disallowance of the class action will likely lead to a less comprehensive enforcement of overtime laws for the employees alleged to be affected by the employer’s violations, it must invalidate the class arbitration waiver to ensure that these employees can ‘vindicate [their] unwaivable rights in an arbitration forum.’ (Little [v. Auto Stiegler, Inc. (2003

2011If it concludes, based on these factors, that a class arbitration is likely to be a significantly more effective practical means of vindicating the rights of the affected employees than individual litigation or arbitration, and finds that the disallowance of the class action will likely lead to a less comprehensive enforcement of overtime laws for the employees alleged to be affected by the employer’s violations, it must invalidate the class arbitration waiver to ensure that these employees can ‘vindicate [their] unwaivable rights in an arbitration forum.’ (Little [v. Auto Stiegler, Inc. (2003

2014In his briefing, he argues: ―The Missouri Supreme Court has interpreted Concepcion as holding that Discover Bank was preempted because ‗it required class arbitration even if class arbitration disadvantaged consumers and was unnecessary for the consumer to obtain a remedy.‘ (Brewer v. Missouri Title Loans (Mo. 2012) 364 S.W.3d 486, 489, 494 .) Similarly, a recent analysis of Concepcion concludes that ‗the unconscionability defense in Concepcion ―stood as an obstacle,‖ for preemption purposes, because it was a categorical rule that applied to all consumer cases.

2014In his briefing, he argues: ―The Missouri Supreme Court has interpreted Concepcion as holding that Discover Bank was preempted because ‗it required class arbitration even if class arbitration disadvantaged consumers and was unnecessary for the consumer to obtain a remedy.‘ (Brewer v. Missouri Title Loans (Mo. 2012) 364 S.W.3d 486, 489, 494 .) Similarly, a recent analysis of Concepcion concludes that ‗the unconscionability defense in Concepcion ―stood as an obstacle,‖ for preemption purposes, because it was a categorical rule that applied to all consumer cases.

2013We had previously approved of class arbitration as a means of “ ' “providing] small claimants with a method of obtaining redress for claims which would otherwise be too small to warrant individual litigation. [Citation.]” ’ [Citation.] Denial of a class action in cases where it is appropriate may have the effect of allowing an unscrupulous wrongdoer to 'retain[] the benefits of its wrongful conduct.’ [Citation.]” (Keating v. Superior Court (1982) 31 Cal.3d 584, 609 [ 183 Cal.Rptr. 360 , 645 P.2d 1192 ] (Keating), overruled on other grounds in Southland Corp. v. Keating (1984) 465 U.S. 1, 16 [

2013We had previously approved of class arbitration as a means of “ ' “providing] small claimants with a method of obtaining redress for claims which would otherwise be too small to warrant individual litigation. [Citation.]” ’ [Citation.] Denial of a class action in cases where it is appropriate may have the effect of allowing an unscrupulous wrongdoer to 'retain[] the benefits of its wrongful conduct.’ [Citation.]” (Keating v. Superior Court (1982) 31 Cal.3d 584, 609 [ 183 Cal.Rptr. 360 , 645 P.2d 1192 ] (Keating), overruled on other grounds in Southland Corp. v. Keating (1984) 465 U.S. 1, 16 [

2010Right to Itemized Wage Statements (3) In Zavala v. Scott Brothers Dairy, Inc. (2006) 143 Cal.App.4th 585, 596 [ 49 Cal.Rptr.3d 503 ], the appellate court held that rights related to wage stub itemization under section 226 were "nonnegotiable, nonwaivable, minimum statutory labor standards." [11] Citing section 219, subdivision (a), the Zavala court stated: "These are `minimum substantive guarantees' [citation], because the Legislature has categorically forbidden the modification of any provision of these laws." ( Zavala v. Scott Brothers Dairy, Inc., supra, at p. 596.) Section 226, subdivision

2010Right to Itemized Wage Statements (3) In Zavala v. Scott Brothers Dairy, Inc. (2006) 143 Cal.App.4th 585, 596 [ 49 Cal.Rptr.3d 503 ], the appellate court held that rights related to wage stub itemization under section 226 were "nonnegotiable, nonwaivable, minimum statutory labor standards." [11] Citing section 219, subdivision (a), the Zavala court stated: "These are `minimum substantive guarantees' [citation], because the Legislature has categorically forbidden the modification of any provision of these laws." ( Zavala v. Scott Brothers Dairy, Inc., supra, at p. 596.) Section 226, subdivision

2009(Armendariz, supra, 24 Cal.4th at p. 114 .) “Section 1670.5 is based upon Uniform Commercial Code section 2-302, but expands coverage to include noncommercial contracts.” (Perdue v. Crocker National Bank (1985) 38 Cal.3d 913, 925, fn. 10 [ 216 Cal.Rptr. 345 , 702 P.2d 503 ].) 9 Discover Bank concluded that the class arbitration waiver, provided as a “ ‘bill staffer’ ” amending the cardholder agreement, was procedurally unconscionable because the cardholder was deemed to accept the amendment if he or she did not close the account.

2009(Armendariz, supra, 24 Cal.4th at p. 114 .) “Section 1670.5 is based upon Uniform Commercial Code section 2-302, but expands coverage to include noncommercial contracts.” (Perdue v. Crocker National Bank (1985) 38 Cal.3d 913, 925, fn. 10 [ 216 Cal.Rptr. 345 , 702 P.2d 503 ].) 9 Discover Bank concluded that the class arbitration waiver, provided as a “ ‘bill staffer’ ” amending the cardholder agreement, was procedurally unconscionable because the cardholder was deemed to accept the amendment if he or she did not close the account.

2024(Baycol, at p. 759.) In Franco, supra, 171 Cal.App.4th at page 1288 , the Court of Appeal held the death knell doctrine rendered appealable a superior court order that enforced a class arbitration waiver and required the named plaintiff to arbitrate his claims on an individual basis.

2016This doctrine “ ‘provides that an order which allows a plaintiff to pursue individual claims, but prevents the plaintiff from maintaining the claims as a class action, ... is immediately appealable because it “effectively r[ings] the death knell for the class claims.” ’ [Citations.] Appealability under the death knell doctrine requires ‘an order that (1) amounts to a de facto final judgment for absent plaintiffs, under circumstances where (2) the persistence of viable but perhaps de minimis individual plaintiff claims creates a risk no formal final judgment will ever be entered.’ ” (Ibid.) In

2015(Id. at p. 466.) Gentry required the trial court to determine whether “whether a class . . . action . . . is a significantly more effective practical means of vindicating unwaivable statutory rights, which is a discretionary determination subject to abuse of discretion review.” (Arguelles-Romero v. Superior Court (2010) 184 Cal.App.4th 825, 841 .) Our original opinion directed the trial court, on remand, to determine whether the Gentry factors required that Plaintiffs be allowed to proceed with the class action in spite of the waiver in the agreement.

2012In contrast to the unconscionability analysis in Discover Bank , the rule in Gentry concerns “the effect of a class action waiver on unwaivable statutory rights regardless of unconscionability.” (Arguelles-Romero v. Superior Court (2010) 184 Cal.App.4th 825, 836 [ 109 Cal.Rptr.3d 289 ] (Arguelles-Romero).) Specifically, Gentry addresses whether a class arbitration “is a significantly more effective practical means of vindicating unwaivable statutory rights.” (Arguelles-Romero, at p. 841.) Discover Bank and Gentry established two different tests of whether to enforce a class arbitration waiver,

2013(Brown v. Ralph’s Grocery, supra, 197 Cal.App.4th at p. 494 ; Kinecta Alternative Financial Solutions, Inc. v. Superior Court (2012) 205 Cal.App.4th 506, 516 .) Gentry states, “[W]hen it is alleged that an employer has systematically denied proper overtime pay to a class of employees and a class action is requested notwithstanding an arbitration agreement that contains a class arbitration waiver, the trial 10 See, for example, Nelsen v. Legacy Partners Residential, Inc. (2012) 207 Cal.App.4th 1115, 1131-1132 (collecting cases). 11 Our Supreme Court states in Gentry that it granted review to cl

2012(Gentry, supra, 42 Cal.4th at p. 463 ; see Brown, supra, 197 Cal.App.4th at p. 497 ; Kinecta, supra, 205 Cal.App.4th at p. 517 .) Specifically, the Gentry court stated that when it is alleged that an employer has systematically denied proper overtime pay to a class of employees and a class action is requested notwithstanding an arbitration agreement that contains a class arbitration waiver, the trial court must consider the following four factors: (1) “the modest size of the potential individual recovery”; (2) “the potential for retaliation against members of the class”; (3) “the fact that abs

2011If it concludes, based on these factors, that a class arbitration is likely to be a significantly more effective practical means of vindicating the rights of the affected employees than individual litigation or arbitration, and finds that the disallowance of the class action will likely lead to a less comprehensive enforcement of overtime laws for the employees alleged to be affected by the employer’s violations, it must invalidate the class arbitration waiver to ensure that these employees can ‘vindicate [their] unwaivable rights in an arbitration forum.’ (Little [v. Auto Stiegler, Inc. (2003

2011If it concludes, based on these factors, that a class arbitration is likely to be a significantly more effective practical means of vindicating the rights of the affected employees than individual litigation or arbitration, and finds that the disallowance of the class action will likely lead to a less comprehensive enforcement of overtime laws for the employees alleged to be affected by the employer’s violations, it must invalidate the class arbitration waiver to ensure that these employees can ‘vindicate [their] unwaivable rights in an arbitration forum.’ (Little [v. Auto Stiegler, Inc. (2003

2024Citing Franco, the court in Miranda v. Anderson Enterprises, Inc. (2015) 241 Cal.App.4th 196, 199, 201 , held the death knell doctrine applied to render appealable a trial court order compelling arbitration of the plaintiff’s individual PAGA claim and dismissing a non-individual PAGA claim.

2016Although the death knell doctrine is usually discussed in the context of class claims, both class claims and representative PAGA claims “are forms of representative actions, whereby one or more plaintiffs seek recovery on behalf of nonparties. [Citation.] In both types of action, the potential recovery is greater if the claim is brought as a class or representative action than it would be if the plaintiff sought only individual relief. [Citations.] In both, the represented nonparties are bound by any final judgment.” ( Miranda, supra, 241 Cal.App.4th at pp. 200–201.) “The rationale underlying

2013We had previously approved of class arbitration as a means of “ ' “providing] small claimants with a method of obtaining redress for claims which would otherwise be too small to warrant individual litigation. [Citation.]” ’ [Citation.] Denial of a class action in cases where it is appropriate may have the effect of allowing an unscrupulous wrongdoer to 'retain[] the benefits of its wrongful conduct.’ [Citation.]” (Keating v. Superior Court (1982) 31 Cal.3d 584, 609 [ 183 Cal.Rptr. 360 , 645 P.2d 1192 ] (Keating), overruled on other grounds in Southland Corp. v. Keating (1984) 465 U.S. 1, 16 [

2013We had previously approved of class arbitration as a means of “ ' “providing] small claimants with a method of obtaining redress for claims which would otherwise be too small to warrant individual litigation. [Citation.]” ’ [Citation.] Denial of a class action in cases where it is appropriate may have the effect of allowing an unscrupulous wrongdoer to 'retain[] the benefits of its wrongful conduct.’ [Citation.]” (Keating v. Superior Court (1982) 31 Cal.3d 584, 609 [ 183 Cal.Rptr. 360 , 645 P.2d 1192 ] (Keating), overruled on other grounds in Southland Corp. v. Keating (1984) 465 U.S. 1, 16 [

2015(People v. Mosley (2015) 60 Cal.4th 1044, 1055, fn. 7 [ 185 Cal.Rptr.3d 251 , 344 P.3d 788 ]; see Brown v. Wells Fargo Bank, N.A. (2008) 168 Cal.App.4th 938, 956 [ 85 Cal.Rptr.3d 817 ] [declining to consider procedural unconscionability given finding of no substantive unconscionability]; Crippen v. Central Valley RV Outlet (2004) 124 Cal.App.4th 1159, 1167 [ 22 Cal.Rptr.3d 189 ] (Crippen) [declining to consider substantive unconscionability given finding of no procedural unconscionability].) It is improper to decide the issue because, as explained earlier, the trial court made no findings rega

2015(People v. Mosley (2015) 60 Cal.4th 1044, 1055, fn. 7 [ 185 Cal.Rptr.3d 251 , 344 P.3d 788 ]; see Brown v. Wells Fargo Bank, N.A. (2008) 168 Cal.App.4th 938, 956 [ 85 Cal.Rptr.3d 817 ] [declining to consider procedural unconscionability given finding of no substantive unconscionability]; Crippen v. Central Valley RV Outlet (2004) 124 Cal.App.4th 1159, 1167 [ 22 Cal.Rptr.3d 189 ] (Crippen) [declining to consider substantive unconscionability given finding of no procedural unconscionability].) It is improper to decide the issue because, as explained earlier, the trial court made no findings rega

2015(People v. Mosley (2015) 60 Cal.4th 1044, 1055, fn. 7 [ 185 Cal.Rptr.3d 251 , 344 P.3d 788 ]; see Brown v. Wells Fargo Bank, N.A. (2008) 168 Cal.App.4th 938, 956 [ 85 Cal.Rptr.3d 817 ] [declining to consider procedural unconscionability given finding of no substantive unconscionability]; Crippen v. Central Valley RV Outlet (2004) 124 Cal.App.4th 1159, 1167 [ 22 Cal.Rptr.3d 189 ] (Crippen) [declining to consider substantive unconscionability given finding of no procedural unconscionability].) It is improper to decide the issue because, as explained earlier, the trial court made no findings rega

2015(People v. Mosley (2015) 60 Cal.4th 1044, 1055, fn. 7 [ 185 Cal.Rptr.3d 251 , 344 P.3d 788 ]; see Brown v. Wells Fargo Bank, N.A. (2008) 168 Cal.App.4th 938, 956 [ 85 Cal.Rptr.3d 817 ] [declining to consider procedural unconscionability given finding of no substantive unconscionability]; Crippen v. Central Valley RV Outlet (2004) 124 Cal.App.4th 1159, 1167 [ 22 Cal.Rptr.3d 189 ] (Crippen) [declining to consider substantive unconscionability given finding of no procedural unconscionability].) It is improper to decide the issue because, as explained earlier, the trial court made no findings rega

2015(People v. Mosley (2015) 60 Cal.4th 1044, 1055, fn. 7 [ 185 Cal.Rptr.3d 251 , 344 P.3d 788 ]; see Brown v. Wells Fargo Bank, N.A. (2008) 168 Cal.App.4th 938, 956 [ 85 Cal.Rptr.3d 817 ] [declining to consider procedural unconscionability given finding of no substantive unconscionability]; Crippen v. Central Valley RV Outlet (2004) 124 Cal.App.4th 1159, 1167 [ 22 Cal.Rptr.3d 189 ] (Crippen) [declining to consider substantive unconscionability given finding of no procedural unconscionability].) It is improper to decide the issue because, as explained earlier, the trial court made no findings rega

2015(People v. Mosley (2015) 60 Cal.4th 1044, 1055, fn. 7 [ 185 Cal.Rptr.3d 251 , 344 P.3d 788 ]; see Brown v. Wells Fargo Bank, N.A. (2008) 168 Cal.App.4th 938, 956 [ 85 Cal.Rptr.3d 817 ] [declining to consider procedural unconscionability given finding of no substantive unconscionability]; Crippen v. Central Valley RV Outlet (2004) 124 Cal.App.4th 1159, 1167 [ 22 Cal.Rptr.3d 189 ] (Crippen) [declining to consider substantive unconscionability given finding of no procedural unconscionability].) It is improper to decide the issue because, as explained earlier, the trial court made no findings rega

2014If it concludes, based on these factors, that a class arbitration is likely to be a significantly more effective means of vindicating the rights of the affected employees than individual litigation or arbitration, and finds that the disallowance of the class action will likely lead to a less comprehensive enforcement of overtime laws for employees alleged to be affected by the employer’s violations, it must 12 invalidate the class arbitration waiver to ensure that these employees can ‘vindicate [their] unwaivable rights in an arbitration forum.’ [Citation.]” (Gentry, supra, 42 Cal.4th at p. 46

2014If it concludes, based on these factors, that a class arbitration is likely to be a significantly more effective means of vindicating the rights of the affected employees than individual litigation or arbitration, and finds that the disallowance of the class action will likely lead to a less comprehensive enforcement of overtime laws for employees alleged to be affected by the employer’s violations, it must 12 invalidate the class arbitration waiver to ensure that these employees can ‘vindicate [their] unwaivable rights in an arbitration forum.’ [Citation.]” (Gentry, supra, 42 Cal.4th at p. 46

2013(Brown v. Ralph’s Grocery, supra, 197 Cal.App.4th at p. 494 ; Kinecta Alternative Financial Solutions, Inc. v. Superior Court (2012) 205 Cal.App.4th 506, 516 .) Gentry states, “[W]hen it is alleged that an employer has systematically denied proper overtime pay to a class of employees and a class action is requested notwithstanding an arbitration agreement that contains a class arbitration waiver, the trial 10 See, for example, Nelsen v. Legacy Partners Residential, Inc. (2012) 207 Cal.App.4th 1115, 1131-1132 (collecting cases). 11 Our Supreme Court states in Gentry that it granted review to cl

2012(Id. at pp. 1283-1285.) The Franco court reversed the order granting the petition to compel arbitration, concluding that the arbitration agreement as a whole was tainted with illegality and was unenforceable because it contained a class arbitration waiver and precluded the plaintiff from seeking civil penalties on behalf of other employees, contrary to the PAGA. ( 171 Cal.App.4th at p. 1303 .) In considering the arbitration agreement’s waiver of the right to bring claims in a private attorney general capacity, the Franco court examined the purpose of the PAGA and noted that the default civil p

2012(Id. at pp. 1283-1285.) The Franco court reversed the order granting the petition to compel arbitration, concluding that the arbitration agreement as a whole was tainted with illegality and was unenforceable because it contained a class arbitration waiver and precluded the plaintiff from seeking civil penalties on behalf of other employees, contrary to the PAGA. ( 171 Cal.App.4th at p. 1303 .) In considering the arbitration agreement’s waiver of the right to bring claims in a private attorney general capacity, the Franco court examined the purpose of the PAGA and noted that the default civil p

2011Where the trial court’s decision on arbitrability is based upon resolution of disputed facts, we review the decision for substantial evidence. . . .” ’ (Amalgamated Transit Union Local 1277 v. Los Angeles County Metropolitan Transportation Authority (2003) 107 Cal.App.4th 673, 685 [ 132 Cal.Rptr.2d 207 ].) [f] The party opposing arbitration has the burden of establishing that an arbitration provision is invalid.

2011Where the trial court’s decision on arbitrability is based upon resolution of disputed facts, we review the decision for substantial evidence. . . .” ’ (Amalgamated Transit Union Local 1277 v. Los Angeles County Metropolitan Transportation Authority (2003) 107 Cal.App.4th 673, 685 [ 132 Cal.Rptr.2d 207 ].) [f] The party opposing arbitration has the burden of establishing that an arbitration provision is invalid.