Sakkab v. Luxottica Retail North America, Inc.
803 F.3d 425
| 9th Cir. | 2015Background
- Plaintiff Shukri Sakkab, a former Luxottica employee, sued for wage-and-hour violations and added a non-class representative claim under California’s Private Attorneys General Act (PAGA).
- Luxottica’s dispute-resolution agreement required arbitration and contained a broad waiver of class/representative claims, which Sakkab had signed.
- District court compelled arbitration under the Federal Arbitration Act (FAA), relying on AT&T Mobility v. Concepcion, and dismissed the complaint.
- After that decision, the California Supreme Court in Iskanian held pre-dispute waivers of representative PAGA claims unenforceable under state law.
- On appeal, the Ninth Circuit considered whether the FAA preempts California’s Iskanian rule and whether Sakkab’s representative PAGA claim must be arbitrated or litigated.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the FAA preempts California’s rule (Iskanian) barring waiver of representative PAGA claims | Sakkab: the Iskanian rule is a valid generally applicable contract defense; FAA does not preempt it | Luxottica: FAA and Concepcion preempt any state rule that prohibits arbitration of representative claims or enforces class/representative-waiver invalidation | Held: FAA does not preempt Iskanian; the rule is a generally applicable defense and does not conflict with FAA objectives because PAGA representative claims differ from class arbitration and need not impose class-like procedures |
| Remedy/severability: If the PAGA waiver is unenforceable, must representative PAGA claims be arbitrated or litigated? | Sakkab: the representative PAGA waiver is unenforceable and he must have a forum for his representative claim | Luxottica: arbitration agreement addresses scope and may exclude representative PAGA claims; non-PAGA claims are arbitrable | Held: Non-PAGA claims must be arbitrated; the district court’s dismissal is reversed and the district court must decide in the first instance whether surviving representative PAGA claims proceed in court or arbitration (severability and forum to be resolved below) |
Key Cases Cited
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (state rule invalidating class‑action waivers preempted when it conflicts with FAA objectives)
- Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal.4th 348 (Cal. 2014) (California Supreme Court: pre‑dispute waivers of representative PAGA claims unenforceable)
- Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983) (FAA embodies a national policy favoring enforcement of arbitration agreements)
- Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996) (preemption analysis centers on congressional purpose; presumption against preemption of state police powers)
- Stolt‑Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (2010) (class arbitration alters fundamental attributes of bilateral arbitration)