Truly Nolen of America v. Superior Court
145 Cal. Rptr. 3d 432
Cal. Ct. App.2012Background
- Plaintiffs filed a California wage-and-hour class action against Truly Nolen alleging various Labor Code violations.
- Both plaintiffs signed arbitration agreements as part of Truly Nolen’s Resolve Program; Luna signed in April 2005 and Miranda in August 2006.
- The agreements require binding arbitration administered by AAA with broad scope and waiver of jury trial, plus cost allocation by Truly Nolen.
- The trial court compelled arbitration but refused to order individual arbitration, citing Gentry v. Superior Court.
- The court remanded to determine whether the arbitration contract impliedly permits class arbitration; the FAA governs the agreements.
- This writ proceeding reviews preemption and California law interplay with class arbitration concepts after Concepcion and Stolt-Nielsen.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Gentry remains valid after Concepcion and Stolt-Nielsen | Gentry should apply due to its public-policy basis for wage claims | Gentry overruled by Concepcion and Stolt-Nielsen; mutual consent required | Gentry remains persuasive but not controlling; remand to assess implied agreement on class arbitration |
| Whether the record supports Gentry’s four-factor test here | Factors show class arbitration is more effective for wage claims | Record is too general; factors not shown in specific case facts | Gentry factors not established; remand for implied agreement analysis |
| Whether there is an implied agreement to permit class arbitration | Implied mutual consent from contract language and circumstances | No express waiver; implied consent must be proven | Issue to be resolved on remand with full evidence on implied agreement under Stolt-Nielsen and California contract law |
| NLRA preemption issue regarding class arbitration | NLRA rights support class arbitration for concerted activity | FAA preemption requires enforcement of contract terms; NLRA view rejected | NLRA-based rejection rejected; FAA governs arbitration; issue not resolved in this opinion |
| Trial court authority to decide class arbitration issues | Trial court could decide based on record; arbitrator if contract supports | Arbitrator should decide if contract allows class arbitration | Affirmed that trial court could address class-arbitration issues; remand for implied-agreement analysis |
Key Cases Cited
- Keating v. Superior Court, 31 Cal.3d 584 (Cal. 1982) (authorized court to order class arbitration in appropriate cases without express waiver)
- Armendariz v. Foundation Health Psychcare Serv., Inc., 24 Cal.4th 83 (Cal. 2000) (five Armendariz requirements for waivers of unwaivable rights; unconscionability defense)
- Discover Bank v. Superior Court, 36 Cal.4th 148 (Cal. 2005) (class-action waivers often unconscionable in adhesion contracts; public policy concerns)
- Gentry v. Superior Court, 42 Cal.4th 443 (Cal. 2007) (four-factor test for deeming class waivers invalid in wage-and-hour disputes)
- Stolt-Nielsen S. A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (Supreme Court, 2010) (cannot order class arbitration without mutual assent; contractual basis required)
- Concepcion v. developers of AT&T Mobility, 563 U.S. 333? (Supreme Court, 2011) (overruled Discover Bank on class arbitration; FAA preempts states' unconscionability rule for class waivers)
- Kinecta Alternative Financial Solutions, Inc. v. Superior Court, 205 Cal.App.4th 506 (Cal. App. 2012) (discusses Gentry viability post-Concepcion; dicta on implied agreement)
- Iskanian v. CLS Transportation Los Angeles, LLC, 206 Cal.App.4th 949 (Cal. App. 2012) (claims Gentry validity post-Concepcion; conflict with Concepcion-derived reasoning)
- Brown v. Ralphs Grocery Co., 197 Cal.App.4th 489 (Cal. App. 2011) (discusses Gentry post-Concepcion; dicta on remaining viability)