By Travis Anderson and Shannon Petersen
In Flores v. West Covina Auto Group, — Cal.Rptr.3d —, 2013 WL 139200 (Cal.App. 2 Dist. Jan. 11, 2013), the California Court of Appeal extended the U.S. Supreme Court’s landmark decision in AT&T Mobility, Inc. v. Concepcion, 131 S. Ct. 1740 (2011) by holding that the Federal Arbitration Act preempts any right to a class action under the California Consumers Legal Remedies Act (“CLRA”), and class action waivers in arbitration agreements governed by the FAA are therefore enforceable.
The CLRA grants consumers the right to file class actions to enforce its terms, and—according to the Flores court—provides that “any waiver by a consumer” of this right “is contrary to public policy and shall be unenforceable and void.” Cal. Civ. Code § 1751. The court determined that the FAA preempts the CLRA’s antiwaiver provision because the latter “stands as an obstacle to the accomplishment and execution of the full purposes and objective of the FAA,” which is to enforce arbitration agreements according to their terms. If an arbitration provision is subject to the FAA and contains a class action waiver, the waiver must be enforced regardless of state public policy concerns.
In Flores, consumers filed a putative class action against an car dealership, alleging the dealership sold them a “lemon” and failed to fully disclose all sale terms. The dealership moved to compel arbitration and enforce...
