Reaffirming Individual Arbitration Agreements
In this appeal to the Ninth Circuit, NCLC urged the court to hold that the Federal Arbitration Act (FAA) preempts California’s rule that would require parties to arbitration agreements to be able to pursue public injunction claims in court. A California district court held that the plaintiffs could evade their agreement to arbitrate on an individual basis because they brought claims for public injunctive relief under California’s Unfair Competition Law (“UCL”) and Consumers Legal Remedies Act (“CLRA”). In its amicus brief, NCLC argued that the lower court's decision runs contrary to the Supreme Court's ruling in AT&T Mobility v. Concepcion, which held that when state law prohibits arbitration of a particular type of claim the conflicting rule is displaced by the FAA. If allowed to stand, the lower court's decision would allow plaintiffs to evade FAA preemption by repackaging their disputes as claims for public injunctive relief. The result would be to undermine the arbitration process, which provides a quick, fair and inexpensive method of resolving disputes between parties.
The court granted the parties' joint motion to dismiss appeal voluntarily.
Amicus brief filed 10/31/2011. Case dismissed 11/16/12.