Last week we reported on a decision by one California appellate court holding that U.S. Supreme Court precedent did not overrule the California Supreme Court’s Gentry decision to the extent the latter voids class arbitration waivers that are determined by the court to prevent an employee from vindicating certain statutory rights. Another decision of a different panel of the same California appellate district highlights the broader approach currently taken by California courts on this issue. In an appeal of an order refusing to enforce a class arbitration waiver based on California statutory law, the appellate court reversed, finding that Concepcion made clear that the FAA preempts state law prohibiting a consumer from waiving class action rights. The court noted the current divide with California courts regarding the viability of Gentry, but concluded that it “need not comment on the continuing viability of Gentry because the instant case does not deal with employment issues.” The court did conclude, however, that Concepcion rejects the argument that class action waivers in consumer contracts can be invalidated in order to vindicate statutory rights even if the statutory right is desirable for other reasons” — a position that is apparently not unanimously held in California. Sherf v. Rusnak/Westlake, Case No. B237275 (Cal. Ct. App. October 16, 2012).
This post written by Michael Wolgin.
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