GEZEL SAHELI, Plaintiff and Respondent, v. WHITE MEMORIAL MEDICAL CENTER et al., Defendants and Appellants.
B283217
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION EIGHT
Filed 3/14/18
CERTIFIED FOR PUBLICATION; (Los Angeles County Super. Ct. No. BC651265)
Randolph M. Hammock, Judge.
Seyfarth Shaw LLP, Jeffrey A. Berman, Joan E. Smiles, Dana Peterson, and Kiran A. Seldon for Defendants and Appellants.
Fred J. Hiestand, as Amicus Curiae on behalf of Defendants and Appellants.
Fenton Law Group, LLP, Nicholas D. Jurkowitz and Alexandra de Rivera for Plaintiff and Respondent.
FACTUAL AND PROCEDURAL BACKGROUND
Complaint
Saheli filed her initial complaint against Defendants on February 21, 2017. In the operative First Amended Complaint, Saheli alleges she is a native of Iran and completed medical training at Tehran University of Medical Sciences. After
Saheli alleges that, in response to such reports, Barrio commenced a “campaign of retaliation, harassment, and intimidation” against her, which included yelling at her and threatening to terminate her. According to Saheli, a substantial motivating factor for the yelling was the fact that she is female. In addition, Saheli alleges Barrio made several slurs concerning her Iranian nationality as well as sexual remarks about her and another resident. On March 2, 2017, Saheli was placed on a paid leave of absence pending termination.
Based on these allegations, Saheli asserts nine causes of action against Defendants: (1) retaliation in violation of
On April 3, 2017, Defendants filed a petition to compel Saheli to arbitrate all of her claims, relying on an arbitration agreement found in an employment/training agreement and employee handbook (Arbitration Agreement).2 The Arbitration Agreement provides that it “shall be governed by the Federal Arbitration Act and the Arbitration Act of the state in which the Organization is located.” It further provides that “[a]rbitration pursuant to this [Arbitration Agreement] shall be the exclusive means to address any arbitrable dispute, and the parties mutually waive their right to a trial before a judge or jury in federal or state court in favor of arbitration under this [Arbitration Agreement]. Except as stated herein, the rights of the parties under this [Arbitration Agreement] shall be the same as those available to them in a court of competent jurisdiction. The decision of the arbitrator shall be final and binding on all parties.”
“Arbitrable claims” under the Arbitration Agreement are defined as “those claims . . . that arise out of, or are related to, (i) a claim of employment discrimination . . . ; (ii) a claim of
Saheli opposed Defendants’ petition, arguing the Arbitration Agreement was unenforceable with respect to her Ralph Act and Bane Act claims because it failed to comply with certain requirements for arbitration agreements mandated by those acts. Defendants countered that such requirements are preempted by the FAA.
The trial court granted the petition in part and compelled Saheli to arbitrate all her claims except those under the Ralph Act and Bane Act. The court found that, per the terms of the Arbitration Agreement, the parties agreed not to arbitrate claims that are not arbitrable under California law. It further determined that, pursuant to sections
Defendants appealed.
STANDARD OF REVIEW
Where, as here, the issues presented by a petition to compel arbitration involve only the interpretation of an arbitration agreement, and there are no factual disputes concerning the language of the agreement or its formation, a reviewing court determines the scope and enforceability of the agreement de novo. (Coast Plaza Doctors Hospital v. Blue Cross of California (2000) 83 Cal.App.4th 677, 684; Roman v. Superior Court (2009) 172 Cal.App.4th 1462, 1468–1469; Carlson v. Home Team Pest Defense, Inc. (2015) 239 Cal.App.4th 619, 630.) Preemption is a question of law subject to de novo review. (Choate v. Celite Corp. (2013) 215 Cal.App.4th 1460, 1468–1469.)
DISCUSSION
I. The Parties Did Not Incorporate Preempted State Law into the Arbitration Agreement
Defendants assert the trial court erred in implicitly interpreting the Arbitration Agreement as incorporating state law that is preempted by federal law. We agree.
The FAA3 “requires courts to enforce privately negotiated
Here, the Arbitration Agreement provides that the parties agree not to arbitrate claims that are not arbitrable under “applicable state . . . law.” In other words, a claim is arbitrable under the Arbitration Agreement only if it is arbitrate under “applicable state . . . law.” The parties, however, disagree as to the meaning of the phrase “applicable state . . . law.” Defendants assert the phrase essentially means “applicable state law only to the extent it is not preempted by federal law,” whereas Saheli implies that the phrase means “applicable state law notwithstanding any preemptive effect of federal law.”4
If Saheli’s interpretation is correct, the arbitrability of her Ralph Act and Bane Act claims would turn on whether the Arbitration Agreement complies with certain requirements found in those acts. If Defendants’ interpretation is correct, the question of arbitrability would additionally turn on whether those requirements are preempted by federal law. If preempted, such requirements would not be incorporated into the Arbitration Agreement, and it would be irrelevant whether the Arbitration Agreement complies with them.5
Generally, when faced with the task of determining the meaning of contractual language, we apply well-established rules of contract interpretation. The California Supreme Court summarized such rules in TRB Investments, Inc. v. Fireman’s Fund Ins. Co. (2006) 40 Cal.4th 19: ” ‘ “The fundamental rules of contract interpretation are based on the premise that the interpretation of a contract must give effect to the ‘mutual intention’ of the parties. ‘Under statutory rules of contract interpretation, the mutual intention of the parties at the time the contract is formed governs interpretation. (
In Imburgia, supra, 136 S.Ct. 463, the United States Supreme Court held that language very similar to that now before us unambiguously excluded state law preempted by the FAA, and a contrary interpretation would itself be preempted by the FAA. In that case, the plaintiffs entered into service agreements with DIRECTV that contained arbitration agreements and waivers of class arbitration. (Id. at p. 466.) The agreements provided that if the “law of your state” makes
In 2008, the plaintiffs brought an action against DIRECTV in California state court. (Imburgia, supra, 136 S.Ct. at p. 466.) DIRECTV did not attempt to compel arbitration, presumably because the Discover Bank rule would have rendered the arbitration agreements unenforceable. While the action was pending, the United States Supreme Court decided AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333 (Concepcion), which concluded the FAA preempts the Discover Bank rule. In effect, this meant class arbitration waivers were now enforceable if contained in agreements governed by the FAA. Sometime thereafter, DIRECTV moved to compel arbitration of the plaintiffs’ claims. (Imburgia, supra, at p. 466.)
Despite Concepcion’s invalidation of the Discover Bank rule, a California Court of Appeal denied DIRECTV’s motion to compel arbitration. The court determined the phrase “law of your state” contained in the service contracts referred to California law notwithstanding its preemption by the FAA. The court reasoned that the phrase was ambiguous and should therefore be construed against the drafter, DIRECTV. (Id. at p. 467.) Based on this interpretation, the court concluded the arbitration agreements remained unenforceable.
The United States Supreme Court reversed. (Imburgia, supra, 136 S.Ct. at p. 471.) It held that, because the Court of Appeal employed principles and reasoning not applicable to
In reaching this decision, the Supreme Court detailed numerous ways in which the Court of Appeal’s interpretation of the phrase “law of your state” was inconsistent with California law. It began by noting that California courts would normally find the phrase to be unambiguous: “Absent any indication in the contract that this language is meant to refer to invalid state law, it presumably takes its ordinary meaning: valid state law. Indeed, neither the parties nor the dissent refer us to any contract case from California or from any other State that interprets similar language to refer to state laws authoritatively held to be invalid.” (Imburgia, supra, 136 S.Ct. at p. 469.) Moreover, under California’s general contract principles, “references to California law incorporate the California Legislature’s power to change the law retroactively.” (Ibid.) The high court further criticized the Court of Appeal for its failure to provide any reasoning or principles to suggest it would reach the same interpretation in a non-arbitration context, its
We perceive no meaningful difference between the phrases ” ‘law of your state’ ” and ” ‘applicable state . . . law’ ” that would lead us to interpret the latter differently than the United States Supreme Court interpreted the former. Like the phrase ” ‘law of your state,’ ” the phrase “applicable state . . . law” is not ambiguous and its ordinary meaning refers only to valid state law. (See Imburgia, supra, 136 S.Ct. at p. 469.) Saheli has not provided any reasoning or general principles of contract interpretation that would lead to a different interpretation.7 Nor has she pointed us to any cases in which courts have interpreted similar language in the manner she suggests. Accordingly, we interpret the phrase “applicable state . . . law” to encompass only California law that is not preempted by the FAA. (
Saheli suggests that Imburgia is distinguishable because there, the relevant restriction on arbitration had been declared preempted prior to DIRECTV’s attempt to compel arbitration. Here, in contrast, there had been no judicial declaration that the relevant portions of the Ralph Act and Bane Act are preempted by the FAA when Defendants petitioned the trial court to compel arbitration.
II. The Ralph Act and Bane Act are Preempted by the FAA to the Extent They Condition the Enforceability of Arbitration Agreements on Compliance with Special Requirements Not Applicable to Contracts Generally
Given our interpretation of the phrase “applicable state . . . law,” the Arbitration Agreement’s failure to comply with
A. The Ralph Act and Bane Act
“The Legislature’s focused effort to combat discriminatory and pernicious conduct often referred to as hate crimes began with the 1976 enactment of
A civil action for a violation of the Ralph Act may be brought by an aggrieved individual, the Attorney General, a district attorney, or a city attorney. (See
Ten years after enacting the Ralph Act, the Legislature enacted section
In 2014, the Legislature passed Assembly Bill No. 2617 (AB 2617), which limited the circumstances under which an individual may waive his or her rights under the Ralph Act and Bane Act, including the right to a judicial forum and procedures. As amended, section
It further provides that “[a]ny waiver of any legal right, penalty, remedy, forum, or procedure for a violation of this section that is required as a condition of entering into a contract for goods or services shall be deemed involuntary, unconscionable, against public policy, and unenforceable.” (
B. FAA Preemption
“The FAA was designed ‘to overrule the judiciary’s long-standing refusal to enforce agreements to arbitrate,’ [citation], and to place such agreements ‘ “upon the same footing as other contracts,” ’ [Citation.] While Congress was no doubt aware that the Act would encourage the expeditious resolution of disputes, its passage ‘was motivated, first and foremost, by a congressional
Section 2 of the FAA “declares written provisions for arbitration ‘valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.’
C. Analysis
The Ralph Act and Bane Act, as amended by AB 2617, unquestionably discriminate against arbitration by placing special restrictions on waivers of judicial forums and procedures in connection with claims brought under those acts. In effect, sections
Sections
The legislative history of AB 2617 confirms that the Ralph Act’s and Bane Act’s special requirements represent a hostility to arbitration and their purpose is primarily, if not exclusively, to discourage arbitration of Ralph Act and Bane Act claims.9 A Senate Judiciary Committee analysis states that the amendments were needed because “courts are increasingly inclined to honor a signed waiver requiring the parties to submit to arbitration” Ralph Act and Bane Act claims, which, in practice, “seriously undermine[s]” the “spirit and intent of the state’s civil rights law.” (Sen. Com. on Judiciary, Analysis of Assem. Bill No. 2617 (2013–2014 Reg. Sess.) June 23, 2014, pp. 3–4.) An Assembly Judiciary Committee report explains that the specific impetus for the bill was a “controversial” case, D.C. v. Harvard-Westlake School (2009) 176 Cal.App.4th 836 (Harvard-Westlake), in which a young man and his parents were compelled to arbitrate Ralph Act and Bane Act claims asserted against the young man’s school. (Assem. Com. on Judiciary, Analysis of Assem. Bill No. 2617 (2013–2014 Reg. Sess.) April 25, 2014,
The Assembly report proceeds to detail numerous supposed shortcomings of arbitration. Under a section titled “Private Arbitration Is Essentially Unregulated And Highly Controversial When It Is Mandatory, Rather Than Voluntary,” the report notes that “arbitrators are not regulated in any fashion; they need not be trained in the law, or even apply the law in a particular dispute, or render a decision consistent with the evidence presented to them. What evidence is presented may, in fact, be incomplete because parties in arbitration have no legal right to obtain evidence in support of their claims or defenses, or the claims or defenses of the other party, contrary to the longstanding discovery practice in public courts. . . . There is no need to justify [the arbitrator‘s] decision because the law and the evidence need not be followed and because there is no right for any party to appeal or obtain an independent review of the arbitrator‘s ruling unless the contract expressly so provides.” (Assem. Com. on Judiciary, Analysis of Assem. Bill No. 2617 (2013-2014 Reg. Sess.) April 25, 2014, at pp. 5-6.) The analysis
The above legislative history clearly shows the motivating force behind the enactment of AB 2617 was a belief that arbitration is inherently inferior to the courts for the adjudication of Ralph Act and Bane Act claims. In accordance with this dim view of arbitration, the Legislature placed special restrictions on waivers of judicial forums and procedures in connection with such claims. In practice, such restrictions discourage arbitration by invalidating otherwise valid arbitration agreements. It is precisely this sort of hostility to arbitration that the FAA prohibits.
Saheli suggests that sections 51.7‘s and 52.1‘s special requirements escape FAA preemption because they merely place restrictions on arbitration agreements and do not ban them outright.10 We disagree. It is well-established that a law need not prohibit entirely arbitration agreements to be preempted by the FAA. (See, e.g., Doctor‘s Associates, supra, 517 U.S. 681 [FAA
We also reject Saheli‘s assertion that the FAA “displaces” the Ralph Act and Bane Act, and therefore Defendants must show that “Congress intended to disrupt the statutory enforcement scheme” and “interfere with California‘s ability to curb discriminatory violence.” The premises of Saheli‘s argument are flawed. The FAA does not displace the Ralph Act and Bane Act. Nor does it interfere with their enforcement schemes or California‘s ability to curb discriminatory violence. Instead, the FAA simply mandates that we treat agreements to arbitrate, including agreements to arbitrate Ralph Act and Bane Act claims, as we would other contracts. The special requirements in sections 51.7 and 52.1 do not comport with this mandate, and are therefore preempted by the FAA.
Saheli contends that sections 51.7‘s and 52.1‘s special requirements avoid preemption because they apply to the waiver of “any legal right, penalty, remedy, forum, or procedure” under the Ralph Act and Bane Act. According to Saheli, because the requirements are not targeted solely at arbitration agreements, they fall within section 2‘s saving clause as grounds that exist at law or in equity for the revocation of any contract. We disagree.
In Southland Corp. v. Keating (1984) 465 U.S. 1 (Southland), the United States Supreme Court rejected a similar argument to the one advanced by Saheli. In Southland, our nation‘s high court reversed a California Supreme Court decision holding that Corporations Code section 31512 prohibits arbitration of claims brought under the Franchise Investment Law. (See Keating v. Superior Court (1982) 31 Cal.3d 584, 596-597.)
In his dissent in part, Justice Stevens asserted a nearly identical argument to that advanced by Saheli in this case. Like Saheli, Justice Stevens argued the California Supreme Court‘s application of
The majority rejected Justice Stevens‘s argument, stating: “[T]he defense to arbitration found in the California Franchise Investment Law is not a ground that exists at law or in equity ‘for the revocation of any contract’ but merely a ground that exists for the revocation of arbitration provisions in contracts subject to the California Franchise Investment Law. Moreover, under this dissenting view, ‘a state policy of providing special protection for franchisees . . . can be recognized without impairing the basic purposes of the federal statute.’ [Citation.]
Sanchez, supra, 61 Cal.4th 899 is also instructive. In Sanchez, the California Supreme Court held that the Consumers Legal Remedies Act‘s (CLRA) prohibition on the waiver of class actions is preempted by the FAA, despite the fact that the CLRA prohibits the waiver of numerous other statutory rights. (Id. at pp. 923-924; see
Saheli‘s argument fails for the reasons articulated by the courts in Southland and Sanchez. Sections 51.7‘s and 52.1‘s special requirements for waivers of judicial forums or procedures are not “ground[s] that exist[] at law or in equity ‘for the revocation of any contract’ but merely [] ground[s] that exists for the revocation of arbitration provisions in contracts subject to” the Ralph Act and Bane Act. (Southland, supra, 465 U.S. at p. 16, fn. 11.) Although sections 51.7 and 52.1 place the same restrictions on waivers of various other statutory rights, the
2. The Ralph Act‘s And Bane Act‘s Special Requirements Do Not Codify the Doctrine of Unconscionability
Saheli suggests sections 51.7‘s and 52.1‘s special requirements fall within section 2‘s saving clause because they are a codification of the existing doctrine of unconscionability. We find no merit to this argument.
A court may refuse to enforce contracts or clauses in contracts that are unconscionable. (
Sections 51.7‘s and 52.1‘s special requirements for arbitration agreements are not simply a codification of the above-described principles. Although the special requirements potentially reflect elements of procedural unconscionability, they say nothing about substantive unconscionability. Thus, to find that sections 51.7‘s and 52.1‘s prohibitions on the enforcement of certain arbitration agreements codify existing rules of unconscionability would require us to declare all agreements to arbitrate Ralph Act and Bane Act claims, regardless of their actual terms, to be substantively unconscionable. Such a blanket rule is not permitted under the FAA.
In Concepcion, the United States Supreme Court cautioned that even when a court purports to apply a doctrine normally thought to be generally applicable, such as unconscionability, it may not ” ‘rely on the uniqueness of an agreement to arbitrate as a basis for a state-law holding that enforcement would be unconscionable, for this would enable the court to effect what . . . the state legislature cannot.’ [Citation.]” (Concepcion, supra, 563 U.S. at p. 341.) According to our nation‘s high court, “[a]n obvious illustration of this point would be a case finding unconscionable or unenforceable as against public policy consumer arbitration agreements that fail to provide for judicially monitored discovery. . . . A court might reason that no
A declaration that all agreements to arbitrate Ralph Act and Bane Act claims are per se substantively unconscionable would necessarily be premised on the uniqueness of an agreement to arbitrate. Indeed, we could not reach such a conclusion without finding, for whatever reason, that it is inherently unfair to require a party to arbitrate Ralph Act and Bane Act claims. Stated otherwise, Saheli essentially urges us to declare that arbitration, in the abstract and without regard to the specific procedures to which the parties agreed, is fundamentally incapable of fairly adjudicating an entire class of claims. Such a rule would itself represent an improper hostility toward arbitration that would not be permitted under the FAA.
Even if the FAA permitted such a declaration, sections 51.7‘s and 52.1‘s special requirements would still be inconsistent with the existing doctrine of unconscionability. First, by declaring unconscionable arbitration agreements that fail to comply with certain procedural requirements, sections 51.7 and 52.1 preclude courts from performing the sliding scale analysis
3. An Agreement to Arbitrate Ralph Act and Bane Act Claims Does Not Require the Waiver of Substantive Rights or Remedies
Finally, we reject Saheli‘s various arguments that sections 51.7‘s and 52.1‘s special requirements avoid preemption because they are consistent with general California law restricting the waiver of certain substantive rights and remedies. The fundamental flaw with all of these arguments is that Saheli has failed to identify any substantive rights or remedies that are
In passing, and without any explanation or citation to the record or authority, Saheli asserts the Arbitration Agreement precludes injunctive relief. Contrary to this assertion, the Arbitration Agreement provides that the rights of the parties “shall be the same as those available to them in a court of competent jurisdiction.” Further, it expressly empowers the arbitrator to award “such remedies as could be awarded by a court under the applicable substantive law, which may include injunctive or other equitable relief.”
We also find no merit to concerns expressed in the legislative history of AB 2617 that an arbitrator could not provide meaningful, immediate relief—such as a temporary restraining order or preliminary injunction—to prevent the sort of abuse prohibited under the Ralph Act and Bane Act. (Assem. Com. on Judiciary, Analysis of Assem. Bill No. 2617 (2013-2014 Reg. Sess.) April 25, 2014, p. 7.) Such concerns are addressed by
Saheli‘s reliance on McGill v. Citibank, N.A. (2017) 2 Cal.5th 945 (prohibiting the waiver of certain statutory remedies under the CLRA, UCL, and FAL), and Iskanian, supra, 59 Cal.4th 348 (prohibiting the waiver of PAGA claims) is misplaced. Unlike the present controversy, those cases involved agreements to completely waive, in any forum, certain unwaivable substantive rights and remedies. Here, in contrast, the
Although Courts of Appeal have relied on Iskanian to limit pre-dispute agreements to arbitrate PAGA claims, (see Betancourt v. Prudential Overall Supply (2017) 9 Cal.App.5th 439, 445-446; Tanguilig v. Bloomingdale‘s, Inc. (2016) 5 Cal.App.5th 665, 678), the reasoning employed by those courts is not applicable here. In limiting the enforceability of arbitration agreements related to PAGA claims, those courts relied on the fact that a PAGA action is not a “dispute between an employer and an employee arising out of their contractual relationship. It is a dispute between an employer and the state, which alleges directly or through its agents—either the [Labor and Workforce Development] Agency or aggrieved employees—that the employer has violated the Labor Code.” (Iskanian, supra, 59 Cal.4th at pp. 386-387.) Consistent with the representative nature of such actions, prior to asserting a PAGA claim, an individual must give notice to the Labor and Workforce Development Agency (Agency), and may only pursue the claim if the Agency declines to investigate the alleged violation or issue a citation. (See
DISPOSITION
The order denying in part Defendants’ petition to compel arbitration is reversed. The parties are to bear their own costs on appeal.
CERTIFIED FOR PUBLICATION
BIGELOW, P.J.
I concur:
HALL, J.*
* Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
RUBIN, J. - Concurring:
I concur primarily under the compulsion of DIRECTV, Inc. v. Imburgia (2015) 136 S.Ct. 463 (Imburgia). I agree with the majority that, under United States Supreme Court precedent, the reference in the arbitration agreement to “any claim that is non-arbitrable under applicable state or federal law” must be read to refer to state law that is not otherwise preempted by the FAA. Beyond that, I observe that our decision today continues the recent march of our nation‘s jurisprudence toward eliminating the right to a jury trial (or any trial) in a large number of civil cases by its ever-extending embrace of arbitration.1
There is to be sure a long history of appellate jurisprudence that identifies arbitration as a favored procedure. (See, e.g., Burchell v. Marsh (1854) 58 U.S. 344, 349 [“Arbitrators are judges chosen by the parties to decide the matters submitted to them, finally and without appeal. As a mode of settling disputes, it should receive every encouragement from courts of equity.“]. The current accelerated progression of cases that have been judicially removed from the trial courts picked up speed primarily with the United States Supreme Court opinion in AT&T Mobility LLC v. Concepcion (2011) 131 S.Ct. 1740 (AT&T Mobility).
In the six years following AT&T Mobility, the United States Supreme Court alone has issued opinion after opinion - 12 in total - either upholding arbitration agreements in the face of various challenges to their enforceability or directing lower courts to reconsider their previous decisions in light of AT&T Mobility. In addition to Imburgia, these cases include Kindred Nursing Centers Ltd. P‘ship v. Clark (2017) 137 S.Ct. 1421, 1426-1428 [state law prohibiting attorney-in-fact from waiving right of access to courts]; American Express Co. v. Italian Colors Rest. (2013) 133 S.Ct. 2304 [class action waiver in dispute between merchants and credit card issuer]; Nitro-Lift Techs., L.L.C. v. Howard (2012) 568 U.S. 17 [arbitrator must decide noncompetition clause]; Marmet Health Care Ctr, Inc. v. Brown (2012) 565 U.S. 530, 532-533 [state law prohibiting predispute agreements to arbitrate personal injury claims against nursing homes]; CompuCredit Corp. v. Greenwood (2012) 565 U.S. 95 [arbitration under the Credit Repair Organization Act].)2
Today we find ourselves enforcing an employment agreement‘s mandatory arbitration clause for claims based on two California statutes, the Bane Act and the Ralph Act, that provide civil remedies for hate crimes, intimidation and violence. (
In a series of cases going back some 20 years, California courts have repeatedly decried the rising number of hate crimes and related conduct.4 Yet such conduct proliferates. The most recent Bureau of Justice Statistics Report on hate crimes, states that “U.S. residents experienced an average of 250,000 hate crime victimizations each year from 2004 to 2015.” (Hate Crime Victimization, 2004-2015 <https://www.bjs.gov/content/pub/
I do not intend to suggest that the allegations in the present case, even if true, suggest conduct that even remotely resembles the vast majority of the hate crimes tabulated in the BJS statistics. They clearly do not, but that is beside the point. Both the Bane Act and the Ralph Act expressly represent part of the arsenal of legislative weapons against hate crimes, threats and intimidation, weapons that include enforcement of criminal laws, complaints to housing, employment and other agencies, and the prosecution of civil lawsuits. (See Stamps v. Superior Court (2006) 136 Cal.App.4th 1441, 1445-1448.) Our opinion today facilitates the elimination through arbitration clauses of civil
The majority also finds that respondent‘s unconscionability argument is unpersuasive. Although I do not agree with the entirety of the majority‘s analysis, I concur because I do not believe respondent has sufficiently preserved the issue on appeal. I address both points briefly.
The one state law defense to the enforceability of an arbitration clause that seems to have withstood, for now, the present onslaught is unconscionability. (See Kindred Nursing Centers Ltd. P‘ship v. Clark (2017) 137 S.Ct 1421, 1426.) Our state legislature went to great lengths in 2014 to craft amendments to the Ralph Act and Bane Act that would fit within traditional notions of unconscionability. Those amendments provide that a predispute agreement to waive any rights or remedies under the statutes imposed as a mandatory condition of entering into a contract for goods or services is deemed unconscionable. (
Substantively, the Legislature has determined that protections against hate crimes are sufficiently compelling, and implicate important public policies, such that their waiver is so unfair and one-sided as to be substantively unconscionable. This seems perfectly reasonable to me. The Ralph Act and Bane Act
The majority strikes down the Legislature‘s determination by relying on two lines of authority: the latter holds that a blanket assumption that arbitration provisions are substantively unconscionable is impermissibly hostile to arbitration; the former holds that a statute hostile to arbitration cannot be saved by being dressed up in language also hostile to other procedures. I have little abstract quarrel with either holding; I concur but with the concern that, in our desire to not be impermissibly hostile to arbitration, we are coming unnecessarily close to elevating arbitration above any other procedures and remedies to the derogation of our right to have disputes tried in civil courts.
The Ralph Act and Bane Act preclude mandatory, predispute waivers of “any legal right, penalty, remedy, forum, or procedure for violation” of the statutes. (
I observe, however, that in opposition to respondents’ petition to compel arbitration, appellant failed to develop an unconscionability defense. The bulk of her opposition to the petition was directed toward the argument that the arbitration provision in her employment contract excluded Ralph Act and Bane Act claims by its very terms, an argument unavailing under Imburgia. To the extent she argued unconscionability at all, she simply stated that the Ralph Act and Bane Act incorporated the common law doctrine of unconscionability, and suggested that the arbitration clause in this case was procedurally unconscionable because “by all indications, Plaintiff did, in fact, have no choice but to accept the terms of the arbitration clause in order to enter into the employment agreement with Defendants.” She submitted no declaration setting forth the circumstances in which she had signed the agreement, or stating that why she believed it to be mandatory. Nor did she argue in any way why the particular arbitration clause in this case was substantively unconscionable. As the procedural unconscionability argument was unsupported by evidence and the substantive unconscionability point was devoid of either evidence or argument, unconscionability was not properly pursued before the
RUBIN, J.
Notes
“A road well-travelled does not the journey ease
“Nor do well placed signposts aid our itineraries
” . . . .”
(“A Road Well Travelled,” David Keig, <https://www.poemhunter.com/poem/a-road-well-travelled> (as of March 13, 2018).)