81 Cal.App.5th 285
Cal. Ct. App.2022Background
- Plaintiff David Evenskaas worked as a paratransit driver for California Transit from Nov. 2017–Aug. 2018 and signed an arbitration agreement that waived class-wide relief.
- Evenskaas filed a wage-and-hour class action against California Transit, its owner, and the payroll administrator.
- Defendants moved to compel arbitration and to dismiss class claims under the arbitration agreement.
- The trial court denied the motion, finding the Federal Arbitration Act (FAA) did not apply because the agreement did not involve interstate commerce, and that under Gentry the class-waiver was unenforceable.
- The Court of Appeal reversed: it held paratransit services mandated by the ADA involve interstate commerce, the FAA applies, and the FAA preempts Gentry so the class-waiver is enforceable.
- The appellate court directed the trial court to grant the motion to compel arbitration and dismiss the class claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the FAA apply to the arbitration agreement (i.e., does the transaction "involve commerce")? | FAA does not apply because California Transit provided only intrastate services entirely within Los Angeles County. | FAA applies because California Transit provided ADA-required paratransit services subject to federal regulation and that, in the aggregate, affect interstate commerce. | FAA applies: paratransit services mandated by the ADA fall within Congress’s commerce power and thus the agreement “involves commerce.” |
| Is the class-action waiver enforceable under federal law or invalid under California law (Gentry)? | The Gentry rule renders class-waivers unenforceable; thus the waiver and entire arbitration agreement are invalid. | FAA preempts Gentry (and under Concepcion/Iskanian class-waivers are enforceable); the waiver is valid. | FAA preempts Gentry; the class-waiver is enforceable and class claims must be dismissed. |
Key Cases Cited
- Citizens Bank v. Alafabco, Inc., 539 U.S. 52 (U.S. 2003) (FAA reaches transactions that "involve" commerce and may apply without showing a specific interstate effect).
- Gonzalez v. Raich, 545 U.S. 1 (U.S. 2005) (Congress may regulate purely local activity if in the aggregate it substantially affects interstate commerce).
- Allied-Bruce Terminix Companies, Inc. v. Dobson, 513 U.S. 265 (U.S. 1995) (interpreting the breadth of the FAA’s "involving commerce" language).
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (U.S. 2011) (FAA preempts state rules that prohibit enforcement of class-arbitration waivers).
- Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal.4th 348 (Cal. 2014) (California Supreme Court recognizing FAA preemption of Gentry in light of Concepcion).
- Gentry v. Superior Court, 42 Cal.4th 443 (Cal. 2007) (state rule that certain employment class-waivers are unenforceable).
- E.E.O.C. v. Waffle House, Inc., 534 U.S. 279 (U.S. 2002) (employment contracts generally covered by the FAA).