Legal experts are expecting to see a significant increase in the number of class-action lawsuits filed in California after the Ninth Circuit Court of Appeals ruled in three cases last week that the Federal Arbitration Act does not pre-empt a California Supreme Court ruling that said a contract prohibiting a party’s right to seek public injunctive relief in any forum is unenforceable in The Golden State.
A copy of the ruling in Blair v. Rent-A-Center, Inc., can be accessed by clicking here.
The defendant had appealed a lower court’s denial of a motion to compel arbitration, arguing that the Federal Arbitration Act (FAA) pre-empts California law. The Ninth Circuit Court of Appeals disagreed, siding with the plaintiffs and the lower court in ruling that injunction claims can be arbitrated, so a California law prohibiting the waiver of injunction claims is not subject to pre-emption under the FAA. For a more detailed backstory of the cases in question, please click here.
Experts are predicting more class action lawsuits to be filed in California following the ruling — which was described as a major pro-consumer decision — even as the defendants consider whether to file an en banc request for the entire Ninth Circuit to review the case or to go to the Supreme Court with a petition to hear arguments. Plaintiffs lawyers will be able to “evade arbitration in ‘virtually every case’ invoking California consumer protection statutes,” according to a published report citing amicus briefs filed by the U.S. Chamber of Commerce.
