Filed 3/14/18
CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION EIGHT

GEZEL SAHELI,

P laintiff and Respondent

,

v.

WHITE MEMORIAL MEDICAL CENTER et al.

,
Defendants and Appellants

. B 2 83217

(Los Angeles County Super. Ct. No. BC651265 )

APPEAL from an order of the Superior Court of Los Angeles County. Randolph M. Hammock , Judge. Reversed

. Seyfarth Shaw LLP, Jeffrey A. Berman, Joan E. Smiles, Dana Peterson, and Kir an 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

.

_____________________________2 Whi te Memorial Medical Center (White Memorial) and Juan Barrio, M.D. (together, Defendant s ) challenge the denial in part of their pe tition to compel arbitration of claims brought against them by Ge zel Saheli, M.D

. Although the trial court
ordered Sah e li to a rbitrate the majority of her claims, it refused

to compel arbitration of her claims brought pursuant to Civil
Code sections 51.7 ( Ralph Act ) and 52.1 (Bane Act)

. 1 Th e court reasoned that the parties’ arbitration agreement failed to comply with special req uirements for agreements to arbitrate such claims. Specifically, section s 51.7 and 52.1 prohibit the
enforcement of agreements to arbitrate Ralph Act and Bane Act
claims that are made as a condition of certain contract s or of providing or receiving goods or services

. They also mandate that the party seeking to enforce an agreement to arbitrate such
claims prove the other party knowingly and voluntarily agreed to
arbitra tion

. Defendant s contend (1) the trial court erred in its interpretation of the partie s’ arbitra tion agreement and (2) the Ralph Act’s and Bane Act’s special requirements for arbitration agreements are preempted by the F eder al Arbitration Act (FAA)

. We agree and reverse the trial court’s order denying Defendant s’ petition to compel arbitra tion of Saheli’s Ralph Act and Bane Act
claims

. FACTUAL AND PROCEDURAL BACKGROUND Complaint Saheli filed her initial complaint against Defendant s on February 21, 2017. In the op erative First Amended Complaint

, Saheli alleges she is a native of Iran an d completed medical training at Tehran University of Medical Sciences. After

1 All further section references are to the Civil Code unless otherwise specified.3

immigrating to the United States, she enrolled in a medical residency program at White Memorial. In July 2016, Saheli discovered and reported to White Memorial violations of the Health Insurance Portability and Accountability Act (HIPAA) by physicians who were sending confidential protected health information by unsecured and unauthorized means. Over the next few months, s he also reported unsafe patient care and
conditions. In September 2016, Saheli reported the violations to
the Accreditation Council for Graduate Medical Education. Saheli alleges that, i n response to such reports, Barrio commenced a “campaign of retaliation, harassment, and intimidation” against her , which i ncluded yelling at her and threatening to terminate her

. According to Saheli, a substantial motivating factor for the yelling was the fact that she i s female. In addition, Saheli alleges Barrio made several slurs concerning
her Iranian nationality as wel l 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 assert s nine causes of
action against Defendant s : (1) retaliation in violation of Health and Safety Code section 1278.5; (2) violation of the Ralph Act (§ 51.7) ; (3) violation of the Bane Act (§ 52.1 ); (4) sexual harassment (§ 51.9); (5) retaliatory wrong ful termination ( Lab

. Code , § 1102.5 ) ; (6) wrongful termination in violation of
fu ndamental public policy; (7) gender discrimination and harassment under the Fair Employment and Housing Act (FEHA) (Gov. Code, § 12900 et seq.); (8) national origin discrimination and harassment under the FEHA; and ( 9) retaliation under the FEHA.4 Petitio n to Compel Arbitration On April 3, 2017, Defendant s filed a petition to compel
Saheli to arbitrate all of her claims , relying on an arbitration agreement found in a n employment/training agreement and employee handbook (Arbitration Agreement)

. 2 The Arbit ration Agreement provide s 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 provide s that “[a]rbitration pursuant to this [ Arbitration Agreement] shall be the e xclusive 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

2 On June 7, 2016, Saheli signed a document entitled “Post

Doctoral Training Agreement,” which mandated that she challenge her terminatio n and all other grievances using White Memorial’s grievance and arbitration procedures as contained in its Employee Handbook. On June 16, 2016, Saheli signed an acknowledgement stating she received a copy of the Employee Handbook and was aware it containe d the arbitration procedures

. She further acknowledged she understood and agreed that she “shall submit all issues covered by the referenced Procedures to final and binding arbitration.” In certain circumstances not relevant here, the Employee Agreement provides a “Fair Hearing Plan” as an alternative to arbitration.5

wrongful or unlawful termination of employment, including claims of constructive discharge; (iii) a claim for wages or other compensation; (iv) a tort claim or any other claim in which punitive damages or emotional distress damages could be awarded that arose out of, or is related to

, the employment relationship; (v) a claim that is related in any manner to the
claims des cribed in (i) through (iv) of this paragraph, whether based on a statu[t]e, public policy, or otherwise. ” However, per the Arbitration Agreement’s “carve

- out” provision, “[c]l aims for unemployment compensation, claims under the National Labor
Relations Ac t, claims under PAGA [Private Attorney General Act] , claims for workers’ compensation benefits , and any claim
that is non

- arbitrable under applicable state or feder al law are
not arbitrable under this [Arbitration Agreement]

. ” Saheli opposed Defendant s’ petition , arguing the
Arbitrat ion 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

. Defendant s countered that such require ments are preempted by the FAA

. The trial court granted the petition in part and compelled
Saheli to arbitrate all her claims e xcept those under the Ralph
Act and Bane Act. The court found that, per the terms of the Arbitration Agreement, the parties a gree d not to arbitrate claims
that a re not arbitrable under California law. It further determined that, pursuant to section s 51.7 and 52.1

, the waiver of any forum or procedure under the Ralph Act and Bane Act is unenforceable unless expressly not made as a condition of entering into a contract for services

. Because Defendant s failed
to show the parties expressly agreed the Arbitration Agreement6

was not a condition of entering into a contract for services

, the court concluded the agreement is unenforceabl e with respect to the Ralph Act and Bane Act claims

. The trial co urt declined to
consider whether the s e requirement s are preempted by the FAA

. Although not asserted as a defense by Saheli , the court proceeded to find the Arbitration Ag reement is not unco nscionable

. It then compelled arbitration of Saheli’s non

- Ralph Act and

- Bane Act
claims.
Defendant s appealed.

STANDARD OF REVIEW Where, as here, the issues presented by a petition to compel arbitration involve only the interpretation of an arbitratio n 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; C arlson 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) 2 15 Cal.App.4th 1460, 1468

– 1469 .)
D ISCUSSION
I

. The Parties Did N ot Incorporate Preempted State
Law into the Arbitration Agreement
Defendant s assert the trial court erred in implicitly interpreting the Arbitration Agreement as incorporating state law t hat is preempted by federal law

. We agree.
T he FAA 3 “requires courts to enforce privately negotiated

3 Saheli does not dispute that the Arbitration Agreement is governed by the FAA.7

agreements to arbitrate, like other contracts, in accordance with
their terms.” ( Volt Info. Sciences v. Leland Stanford Jr. U. (1989) 489 U.S. 468, 478 ( Volt ) .) “Arbitration under the [FAA] is a matter of consent, not coercion, and parties are generally free to structure their arbitration agreements as they see fit. Just as they may limit by contract the issues which they will arbitrate, [citation], so too may they specify by contract the rules under which that arbitration will be conducted.” ( Ibid .) U nder these principle s , the parties “might choose to have portions of their contract governed by the law of Tibet, the law of pre

revolutionary Russia , or (as is relevant here) the law of
California ” irrespective of that law’s preemption by the FAA. ( DIRECTV, Inc. v. Imburgia (2015) 136 S.Ct. 463, 468 ( Imburgia ) ; see Best Interiors, Inc. v. Millie & Severson, Inc. (2008) 161 Cal.App.4th 1320, 1326 [“ev en if the FAA applies

. . . the parties may agree that California law governs their agreement to arbitrate”] .) 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

. ” Defendant s
assert the ph rase 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

4 Defendants additionally assert that, regardless of the preemption issue, the Arbitration Agreement does not mandate compliance with requirements for arbitration agreements found8 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 Defendant s’ interpretation is correct, the question of arbitrability would addition ally turn on whether those requirements are preempted by federal law. If preempted

, such requirements would not be incorporated i nto the Arbitration Agreement, and it would be irrelevant whether the Arbitration Agreement complie s with them. 5
G enerally, w hen 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 T RB Investments, Inc. v. Fireman’ s

in the Ralph Act and Bane Act. They contend the fact that the Arbitration Agreement’s “carve

- out” excludes from arbitration claims for unemployment compensation, claims under the N ational Labor Relations Act, and claims for workers’ compensation benefits, indicates that the phrase “any claim that is non

- arbitrable under applicable state

. . . law” refers only to claims that are subject to adjudication by administrative bodies and ar e not the proper subject of arbitration. Defendants, however, wholly ignore the additional carve

- out for PAGA claims. PAGA claims are not subject to adjudication by administrative bodies. (See Lab. Code, § 2699, subd. (a) [under PAGA, an aggrieved emplo yee may recover civil penalties through a civil action].) Moreover, although PAGA claims may not be the subject of pre

- dispute arbitration agreements, an individual may agree to arbitrate such claims after a dispute has arisen. ( Julian v. Glenair, Inc. ( 2017) 17 Cal.App.5th 853, 870.)

5 The trial court implicitly agreed with Saheli’s interpretation when it declined to consider the issue of FAA preemption.9

Fund Ins. Co. (2006) 40 Cal.4 th 19: “ ‘ “ The fundamental rules of contract interpretation are based on the premise that the interpretation of a co ntract 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. (Civ. Code, § 1636.) Such intent is to be inferred, if possible, solely from the written provisions of the contract. ( Id. , § 1639.) The “ clear and explicit ” meaning of these pro visions, interpreted in the ir “ ordinary and popular sense,” unless “ used by the parties in a technical sense or a special me aning is given to them by usage” ( id ., § 1644), controls judicial interpretation. ( Id. , § 1638.)’ [Citations.]
A [contract] provi sion will be considered ambiguous when it is capable of two or more constructions, both of which are
reasonable. [Citation.] But language in a contract must be interpreted as a whole, and in the circumstances of the case, and cannot be found to be ambigu ous in the abstract. ” [Citation.]’ ” ( TRB Investments, Inc. v. Fireman’s Fund Ins. Co, supra, at

p. 27.) T he United States Supre me Court has cautioned that we may not apply such rules in a way that “does not place arbitration contracts ‘on equal footing with all other contracts,’ [citation].” ( Imburgia , supra , 1 36 S.Ct. at p. 471.)
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

, a nd a contrary interpretation would itself be preempted by
the FAA

. In that case, the plaintiffs entered into service agreements with DIRECTV that containe d arbitration agreement s and waiver s of class arbitration . ( Id . at p. 466.)
The agreement s pr ovided that if the “law of your state” ma kes10

waiver s of class arbitration un enforceable , the entire arbitration provision is un enforceable. At the time the parties entered into the agreeme nts, California law would have made the class

a rbitration waiver s u nenforceable un der what i s referred to as
the Discover Bank rule. (See Discover Bank v. Superior Court (2005) 36 Cal.4th 148, 162

– 163.) In 2008, the plaintiffs brought an action against D IRECTV
in California s tate 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 agreement s unenforceable. W hile the action was pending, the United States Supreme Court decided AT&T Mobility LLC v. Co ncepcion (2011) 563 U.S. 333 ( Concepcion )

, which concluded the FAA preempt s the Discover Bank rule

. In effect, this meant class arbitration waivers were now enforceable if contained in agreements governed by the FAA. Sometime thereafter, D IRECTV moved to compel arbitration of
the plaintiffs ’ claims

. ( Imburgia, supra , at p. 466.) Despite Concepcion ’s invalidation of the Discover Bank
rule , a Californi a Court of A ppeal de nied 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.) Bas ed 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
A ppeal employed principles and reasoni ng not applicable to11

contracts generally

, its “interpretation of the phrase ‘law of your state’ does not place arbitration contracts ‘on equal footing with all other contracts,’ [citation]. For that reason, it does not give ‘due regard

. . . to the federa l policy favoring arbitration.’ [Citation.] Thus, the Court of Appeal’s interpretation is pre

empted by the Federal Arbitration Act. [Citation.]” ( Ibid .) 6 In reaching this decision, the Supreme Court detailed numerous ways in which the Court of A ppea l’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 p hrase to be una mbiguous : “Absent any indication in the contract that this language is meant to r efer 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 law s 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 C ourt of A ppeal for its failure to provide any reasoning or principles to suggest it would reach the same interpretation in a non

- arbitration context
, its

6 The Supreme Court acknowledged that, “when DIRECTV drafted the contract, the parties likely b elieved that the words ‘law of your state’ included California law that then made class

arbitration waivers unenforceable.” ( Imburgia, supra , 136 S.Ct. at pp. 468

– 469.) Nonetheless, the high court noted the relevant question before it was whether “at the time the Court of Appeal made its decision . . . the ‘law of your state’ included invalid California law.” ( Id . at p. 469.)12

use of language focused solely on arbitration, and its view that state law retains independent force even after being invalid ated

. ( Id . at pp. 469

– 470.)
We perceive no meaningful difference between the phrases

“ ‘ law of your state ’ ” and “ ‘ applicable state

. . . law ’ ” that would
lead us to interpret the latt er different ly than the United States Suprem e Court interpreted the former. Like the phrase “ ‘ law of your state, ’ ” t he phrase “applicable state

. . . law” is not ambiguous and its ordinary meaning refers only to valid state law. (See Imburgia, supra , 1 36 S.Ct. at p. 469.) Saheli has not provide d a ny reasoning or general principles of contract interpretation that would lead to a differ ent interpretation

. 7 Nor
has she pointed us to a ny cases in which courts have interpreted similar language in the manne r she suggests

. Accordingly, we interpret the phrase “applicable state

. . . law” to encompass only California law that is not preempted by the FAA. (§ 1638 [contractual language that is clear and explicit governs].)
Saheli suggests that Imburgia is di stinguishable because there, the relevant restriction on arbitration had been declared preempted prior to DIRECTV’s a ttempt to compel arbitration. Here, in contrast, there ha d been no judicial declaration that the relevant portions of the Ralph Act and Ba ne Act are preempted by the FAA when Defendant s petitioned the trial court to compel
arbitration

.

7 In fact, Saheli simply assumes, without providing or applying any reasoning or principles of contract interpretation, that th e phrase “applicable state

. . . law” includes California law that is preempted by the FAA.13 We do not find this distinction meaningful. I n interpreting the phrase “applicable state

. . . law,” w e are not con cerned with

t he parties’ or the trial court’s understanding of the state of
California law when Defendant s first at tempted to compel
arbitration. 8 Nor, for that matter, are we concerned with the parties’ understanding of the state of California law when they
entered into the Arbitration Agree ment . (See Imburgia, supra

, 136 S.Ct. at pp. 468

– 469 [disregarding fact that parties would
have understood Discover Bank rule to be valid law when they entered into the arbitration agreement].) I nstead, we are concerned only with the meaning of the phras e “applicable

state

. . . law ” as understood by the parties when they entered
into the Arbitration A greement. (§ 1636 [a “contract must be so interpreted as to give effect to the mutual intention of the parties as it existed at the time of contracting”].) As we discussed, the ordinary meaning of the phrase does not encompass preempted state law. The supposed distinction between Imburgia and the present case does not warrant a contrary interpretation.
II

. The Ralph Act and Bane Act are Preempted by t he
FAA to the Extent T hey Condition the Enforceability of Arbitration Agreements on Compli ance with Special Requirements N ot Applicable to Contracts Generally Given our interpretation of the phrase “applicable

state

. . . law,” the Arbitration Agreement’s failure to comply with

8 We also note that a “ ‘judicial construction of a statute is an authoritative statement of what the statute meant before as well as after the decision of the ca se giving rise to that construction.’ [Citations.]” ( McClung v. Employment Development Dept. (2004) 34 Cal.4th 467, 474.)14

state law that is preempted by federal law does not provide a
basis for the trial court to deny Defendants’ petition to compel
arbitration . Here, the trial court denied in part Defendants’ petition to compel arbitration after deter mining the Arbitration Agreement failed to comply with certain requirements found in the Ralph Act and Bane Act. Accordingly, to determine if the trial court erred, we must decide whether those requirements are preempted by the FAA. We find that they are preempted , and the trial court erroneously denied the petition to compel
arbitration of these claims

. A. The Ralph Act and Bane Act “The Legislature’s focused effort to combat discriminatory and pernicious conduct often referred to as hate crimes bega n with the 1976 enactment of Civil Code section 51.7, commonly referred to as the ‘Ralph Civil Rights Act’ or the ‘Ralph Act.’ ” ( Venegas v. County of Los Angeles (2004) 32 Cal.4th 820, 845, conc. opn. of Baxter , J. ( Venegas ) .) The Ralph Act broadly

prov ides that all persons “have the right to be free from any violence, or intimidation by threat of violence, committed against their persons or property” because of, among other things, the person’s race, religion, national origin, sex, sexual orientation, o r position in a labor dispute. (§ 51.7, subd. (a).) Persons who
violate section 51.7 are liable f or actual and exemplary damages, a civil penalty of $25,000 , and attorney fees . (§ 52, subd. (b); Venegas, supra , at p. 842.)
A civil action for a violati on of the Ralph Act may be brought by an aggrieved individual, the Attorney General, a district attorney, or a city attorney. (See § 52, subd. (c).) Regardless of who initiates the action, any civil penalties recovered shall be awarded to the person deni ed the right15

provided by the Ralph Act . ( § 52 , subd. (b)(2).) In addition to a civil action , a n aggrieved individual may file a complaint with the Department of Fair Employment and Housing. ( § 52 , subd. (f).) Ten years after enacting the Ralph Act, th e Legislature
enacted section 52.1

— commonly referred to as the “Tom Bane Civil Rights Act” or “Bane Act”

— which was “intended to supplement the Ralph Civil Rights Act as an additional legislative effort to deter violence.” ( Stamps v. Superior Court (2006) 136 Cal.App.4th 1441, 1447.) Se ction 52.1, subdivision (a), “provides that if a person interferes, or attempts to interfere, by threats, intimidation, or coercion, with the exercise or enjoyment of the constitutional or statutory rights of ‘any individual or individuals,’ the Attorney General, or any district or city attorney, may bring a civil action for equitable or injunctive relief. Subdivision (b) allows ‘[a]ny individual’ so interfered with to sue for damages [under section 52].” ( Venegas , supra , 3 2
Cal.4th at p. 841.) In addition to damages, t he individual may seek “injunctive relief, and other appropriate equitable relief to protect the peaceable exercise or enjoyment of the right or rights secured, including appropriate equitable and declaratory relief to eliminate a pattern or practice of conduct

. . . .” (§ 52.1, subd. (b).) A violation of a temporary restraining order or temporary or permanent injunction issued under section 52.1 “may be punished either by prosecution under Section 422.77 of the Penal Code, or by a proceeding for contempt.” (§ 52.1, subd. (i).) 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 51.7 now provides that “[a]ny waiver of any16

legal right, penalty, remedy, forum, or procedure for a violation of this section, including the right to file and pursue a civil action or complaint with, or otherwise notify, the Attorney General or any other public prosecutor, or law enforcement agency, the Department of Fair Employment and Housing, or any other governmental entity shall be knowing and voluntary, and in writing, a nd expressly not made as a condition of entering into a contract for goods or services or as a condition of providing or receiving goods and services.” (§ 51.7, subd. (3).) It further provides that “ [a] ny waiver of any legal right, penalty, remedy, for um, 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.” ( § 51.7, subd. (4).) In addition, a ny “person who seeks to enforce a waiver of any legal right, penalty, remedy, forum, or procedure for a violation of this section shall have the burden of proving that the waiver was knowing and voluntary and not made as a condition of the contract or of p roviding or receiving the goods or services.” ( § 51.7, subd . (5).) AB 2617 amended the Bane Act to provide that the “rights, penalties, remedies, forums, and procedures of this section shall not be waived by contract except as provided in Section 51.7.” (§ 52.1, subd. (l).)
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 resol ution of disputes, its passage ‘ was motivated, first and foremost, by a congressional17

desire to enforce agreements into which parties had entered. ’ [Citation.]” ( Volt , s upra , 489 U.S. at p. 478 .) 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.’ 9 U.S.C. § 2.” ( Doctor’s Associa tes, Inc. v. Casarotto (1996) 517 U.S. 681, 683 ( Doctor’s Associates ) .) By enacting section 2, “ ‘Congress declared a national policy favoring arbitration and withdrew the power of the states to require a judicial forum for the resolution of claims which the contracting parties agreed to resolve by arbitration.’ [Citation.]” ( Perry v.
Thomas (1987) 482 U.S. 483, 489 ( Perry ) .) Section 2 “requires courts to place arbitration agreements ‘on equal footing with all other contracts.’ [Citations.]” ( Kindred Nursing Centers Ltd. Partnership v. Clark (2017) 137 S.Ct. 1421, 1424 ( Kindred Nursing ).) It precludes “[s] tates from singling out arbitration provisions for suspect status,” ( Doctor’s Associates , supra , 517
U.S. at p. 687), no matter how laudable the rea sons for doing so, ( Iskanian v. CLS Transp ortation Los Angeles, LLC (2014) 59
Cal. 4th 348, 384 ( Iskanian ) )

. In effect

, section 2 of the FAA “preempts any state rule discriminating on its face against
arbitration

— for example, a ‘law prohibit[ing] outright the arbitration of a particular type of claim.’ [Citation.] And not only that: The [FAA] also displaces any rule that covertly accomplishes the same objective by disfavoring contracts that (oh so coincidentally) have the defining features of arbitration agreements.” (

Kindred Nursin g, supra , 137 S.Ct. at p. 1426 ; see Sanchez v. Valencia Holding Co., LLC (2015) 61 Cal.4th 899, 924 ( Sanchez ) [“a state rule can be preempted not only when it facially discriminates against arbitration but also when it18

disfavo rs arbitration as applied”] .) Under section 2’s saving clause, a state court may invalidate an arbitration agreement under generally applicable contract defenses, such as fraud, duress, or unconscionability, but not under a defense that is specific to arb itration agreements. ( Doctor’s Associates , supra , 517 U.S. at p. 687.)
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 proce dures
in connection with claims brought under those acts. In effect

, section s 51.7 and 52.1 deem an agreement to arbitrate such
claims unenforceable unless the party seeking to enforce it proves (1) the other party knowingly and voluntarily agree d to arbi tration , and (2) the arbitration agreement was not made a
condition of a contract for goods or services or of providing or receiving goods or services

. ( § § 51.7, subd. (b)(5) ; 52.1, subd

. (l) .)
For the reasons we discuss, we conclude these restrictions a re preempted by the FAA . Accordingly, t he trial court’s reliance on special requirements found in sections 51.7 and 52.1 to deny in part Defendants’ petition to compel arbitration was in error.
S ections 51.7’s and 52.1’ s s p ecial requirements for

agreeme nts to arbitrate Ralph Act and Bane Act claims do not apply to contracts generally . F or example, the party seeking to
enforce a contract generally need not prove the other party knowingly agreed to each term contained in a written c ontract

. ( Randas v. YM CA of Metropolitan Los Angeles (1993) 17 Cal.App.4th 158, 163 [ “ ‘[o]rdinarily, one who accepts or signs an instrument, which on its face is a contract, is deemed to assent to
all its terms’ ” ]; Marin Storage & Trucking, Inc. v. Benco19

Contracting & Enginee ring, Inc. (2001) 89 Cal.App.4th 1042, 1049 [same].) Moreover

, although mutual assent to a contract is essential, (§§ 1550, 1565), the party opposing enforcemen t of a

contract generally has the burden to show his or her assent was involuntary

. (Evid. Cod e, § 500 [“a party has the burden of proof
as to each fact the existence or nonexistence of which is essential to the . . . defense that he is asserting”] ; Townsend v. Wingler (1952) 114 Cal.App.2d 64, 68 [party seeking to invalidate contract
has burden of showing fraud, undue influence, or coercion]; Fio
Rito v. Fio Rito (1961) 194 Cal.App.2d 311, 322 [defendan t had burden of proving affirmative defense of duress] .) I t is also well

established that there is no general prohibition on contract terms that ar e required as a condition of a contract or of providing or receiving goods or services . (See , e.g., Graham v. Scissor

- Tail,
Inc. (1981) 28 Cal.3d 807, 819

– 820 , fns. omitted [“a contract of adhesion is fully enfo rceable according to its terms [citations]

u nless certain other factors are present which, under established legal rules

- legislative or judicial

- operate to render it
otherwise ”]; Lagatree v. Luce, Forward, Hamilton & Scripps (1999) 74 Cal.App.4th 1105, 1127

– 1128 [“under both federal and
state la w, an employee’s rights to a jury trial and a judicial forum can be validly waived by agreement, even where the waiver is required as a condition of employment”]; Franco v. Arakelian Enterprises, Inc. (2015) 2 34 Cal.App.4th 947, 956 [“ waivers that
are obta ined as a condition of employment and that limit employees ’ ability to vindicate statutory employee protections[] are not categorically invalid or unenforceable”].)
Sections 51.7 ’s and 52.1’s special requirements for waiver s of judicial forum s and procedur es in connection with Ralph Act and
Bane Act claims

— and consequently their limitations on the20

enforcement of arbitration agreements related to such claims

— contravene these general rules of contracts. As such, the special requirements are preempted by the FAA. ( Doctor’s Associates

, supra , 517 U.S. at p. 687 [state law is preempted if it “conditions the enforceability of arbitration agreements on compliance with a special

. . . requirement not applicable to contracts generally”].) The legislative history of AB 2617 confirms t hat the Ralph
Act ’s and Bane Act’s special requirement s 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 a nalysis 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, Analy sis of Assem. Bill No. 2617 (2013

– 2014 Reg. Sess.) April 25, 2014,

9 The United States Supreme Court has suggested that the legislative or judicial intent behind a state law is relevant to the

que stion of FAA preemption. (See Perry, supra , 482 U.S. at

p. 493, fn. 9 [a state law is not preempted “ if that law arose to govern issues concerning the validity, revocability, and enforceability of contracts generally” (italics added)]; Doctor’s Associates , supra , 517 U.S. at pp. 686

- 687 [same].)21

pp. 4

– 5.) The arbitrator found in favor of the school on all claims and awarded attorney fees to the school in accordance with the parties’ arbitration agreement . ( Harvard

- Westlake, supra

, at

p. 847.) The Court of A p peal reversed the award of fees , finding
that an individual cannot waive the Ralph Act ’s and Bane Act ’s prohibition on a defendant’s recovery of attorney fees. ( Id . at

p. 866 .) The Assembly Report criticize s the Harvard

- West lake

court for “ failing to acknowledge that

. . . requiring a party to allow a private arbitrator to decide hate crimes violations is, inherently, a waiver of rights and procedures provided by the

statutes. ” (Assem. Com. on Judiciary, Analysis of Assem. B ill No. 2617 (2013

– 2014 Reg. Sess.) April 25, 2014, p. 7.)
The Assembly r eport 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 disco very prac tice 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 indep endent review of the
arbitrator’ s ruling unl ess 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.) T he analysis22

concludes that, in part due to these supposed shortcomings

, private arbitration is “cont roversial

. . . when it is imposed by more powerful parties without negotiation or the right to withhold consent to unfair terms.” ( Id . at p . 6.) The above legislative history clearly shows the motivating
force behind the enactment of AB 2617 was a bel ief 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 c onnection 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 5 1 .7 ’s and 5 2

. 1 ’s special requirements escape FAA preemption because they merely place
restrictions on arbitration agreements and do not ban them outright

. 10 We disagree. I t is well

- established that a law need

not prohibit entirely arbitration agreements to b e preempted by
the FAA. (See, e.g., Doctor’s Associates, supra , 517 U.S. 681 [ FAA

10 The legislative history suggests AB 2617 was drafted in this way in an attempt to avoid FAA preemption. Under a section titled “Is This Bill Carefully Crafted to Avoid Federal Pre

Emption Questions?,” an Assemb ly report states, “this bill does not bar arbitration or other waiver agreements; it simply makes it unlawful to seek an unknowing and involuntary waiver of rights or procedures regarding abuse laws prior to a dispute arising. Proponents point out that th ere is no state or federal policy favoring involuntary waiver or arbitration agreements.” (Assem. Com. on Judiciary, Analysis of Assem. Bill No. 2617 (2013

– 2014 Reg. Sess.) April 25, 2014, p p

. 7

– 8 .)23

preempts Montana law mandating special notice requirements
for arbitration agreements ]; Hedges v. Carrigan (2004) 117 Cal.App.4th 578, 585 [ FAA preempts font and point size,

n otification, and warning requirements for arbitration agreements in real estate transaction documents]; Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 245 [ FAA preempts requirements “such as proof of actual noti ce, meaningful reflection, signature by all parties, and/or a unilateral modification clause favoring the nondrafting party”]; Scott v. Yoho (2016) 248 Cal.App.4th 392 [ FAA preempts Code of Civil Procedure section 1295’s 30

- day cancellation period for cert ain arbitration agreements related to medical disputes].) Rather, it is sufficient, as is the case here, that the state law “conditions the enforceability of arbitration agreements on compliance with a special

. . . requirement not applicable to contracts generally.” ( Doctor’s Associates , supra , 517 U.S. at p. 687.)
We also reject Saheli’s assertion that the FAA “displaces” the Ralph Act and Bane Act, and therefore Defendant s must show that “Congress intended to disrupt the statutory
enforcement scheme” and “interfere with California’s ability to
curb discriminatory violence.” The premise s of Saheli’s a rgument

are flawed. The FAA does not displace the Ralph Act and Bane
Act. N or does it interfere with their enforcement scheme s or California’ s ability t o curb discriminatory viole nce . 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
section s 51.7 and 52.1 do no t comport with this mandate, and are
therefore preempted by the FAA.24 1. The Ralph Act’s And Bane Act’s S pecial Requirements
Do Not Avoid Preemption b y Virtue of their Application to the Waiver of Any Legal Right, Penalty, Remedy, Forum, or
Procedure
S aheli contends that section s 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 requirement s 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 ), t he U nited States Supreme Cour t rejected a similar argument t o th e one advanced by Saheli . In Southland , our nation’s high court reversed a California Supreme Court decision holding that Corporatio ns Code section 31512 prohibits arbitration of claims brought u nder the Franchise Investment Law. (See Keating v. Superior Court (1982) 31 Cal.3d 584, 596

– 597.) Corporations Code s ection 31512 provides, “Any condition, stipulation or provision purporting to bind any person acquiring any franchise to waive compliance with any provision of this law or any rule or order hereunder is void.” After finding such language prohibits agreements to waive a judicial forum

, the California Supreme Court determined such a prohibition was not preempted by the FAA. The court reason ed that “[s]uch exceptions to the general principle of arbitrability, like those expressed in California’s Franchise Investment Law, do not reflect hostility toward arbitration, nor do they constitute an obstacle to the general enforcement of arbitration a greements in a manner consistent with federal law. Rather, such exceptions25

are narrowly confined to rights and remedies created by state regulatory statutes, and represent a determination that the public interest is best served by maintaining access to th e remedies which the Legislature has provided.” ( Keating v. Superior Court, supra , 31 Cal.3d 584 at p. 602.) The United States Supreme Court reversed, holding that, to the extent Corporations Code section 31512 prohibits arbitration of
California Franchi se Investment Law claims, it i s preempted by the FAA. ( Southland

, supra , 465 U.S. at p. 10.)
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 Corporations Code section 31512 to preclude
arbitration was proper because it was based on such grounds as exist at law or in equity for the revocation of any contract. ( Southland , supra , 465 U.S. at p. 20, dis. o pn. of Stevens, J.) He explained , “A contract which is deemed void is surely revocable at law or in equity, and the California legislature has declared all conditions purporting to waive compliance with the protections of
the Franchise Investment Law, in cluding but not limited to arbitration provisions, voi d as a matter of public policy .” ( Ibid .) The majority rejected Justice Steven s’s argument
, stating :

“ [T] he defense to arbitration found in the California Franchise Investment Law is not a ground t hat 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 stat e policy of providing special protection for franchisees

. . . can be recognized without impairing the basic purposes of the federal statute.’ [Citation.]26

If we accepted this analysis, states could wholly eviscerate

c ongressional intent to place arbitrat ion agreements ‘upon the same footing as other contracts,’ [citation], simply by passing
statutes such as the Franchise Investment Law. We have rejected this analysis because it is in conflict with the Arbitration Act and would permit states to override t he declared policy requiring enforcement of arbitration agreements.” ( Southland,

supra , 465 U.S. at p p. 16

– 17
, fn. 11.) 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 §§ 1751 & 1780.) Our state’s high court rejected
the plaint iff

’ s argument that enforcement of the anti

- waiver provision “merely puts arbitration agreements on an equal footing with other contracts ,” reasoning that “a state rule can be preempted not only when it facially discriminates against
arbitration but also w hen it disfavors arbitration as applied.” ( Sanchez, supra , 61 Cal.4th at p. 924, citing Concepcion, supra

, 563 U.S. at pp. 341

– 342.) Saheli’s argument fails for the reasons articulated by the
courts in Southland and Sanchez

. S ections 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.) A lthough sections 51.7 and 52.1 place the same
restrictions on waivers of various other statutory rights, the27

statutes unquestionably disfavor arbitration as applied

. (See S anchez, supra , 61 Cal.4th at p. 924; Concepcion, supra

, 563 U.S. at pp. 341

– 342. ) Moreover, were we to accept Saheli’s argument, the Legislature could circumvent the FAA by simply declaring a restriction on arbitration agreemen ts equally applicable to the wa i v er of other rights under a particular statutory scheme

. Given the ease with which the Legislature could avoid preemption in this manner , such a rule would, in practice, render ineffective section 2 of the FAA

. (See Southland,

supra , 465 U.S. at p. 1 6
, fn. 11.)
2. The Ralph Act’s And Bane Act’s Special Requirements
Do Not Codify the Doctrine of Unconscionability
Saheli suggests section s 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 r efuse to enforce contracts or clauses in
contracts that are unconscionable . (§ 1670.5 , subd. (a).)

“ ‘[U] unconscionability has both a “ procedural ” and a

“ substantive” element, ’ the former focusing on ‘ “ oppression ” ’

or ‘ “ surprise ” ’ due to unequal b argaining power, the latter on

‘ “ overly harsh ” ’ or ‘ “ one

- sided ” ’ results. [Citation.] ‘ The prevailing view is that [procedural and substantive
unconscion ability] must both be present in order for a court to
exercise its discretion to refuse to enforce a contract or clause under the doctrine of unconscionability. ’ [Citation.] But they need not be present in the same degree. ‘Essentially a sliding
scale i s invoked which disregards the regularity of the procedural process of the contract formation, that creates the terms, in proportion to the greater harshness or unreasonableness of th e28

substantive terms themselves.’ [Citations.] In other words, the

more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa .” ( Armendariz v. Foundation Health Psychcare Services, Inc. (2000)
24 Cal.4t h 83, 114, abrogated on other grounds by Concepcion

, supra , 563 U.S. 333 .)
S ection s 51.7 ’s and 52.1’s special requirements for arbitration agreements are not simply a codification of the above

described principles. A lthough the special requirements pot entially reflect elements of procedural unconscionability

, they

say nothing about substantive unconscionability

. Thus, to find
that section s 51.7 ’s and 52.1’s prohibition s on the enforcement o f
certain arbitration agreements co dify existing rules of

uncon scionability would require us to declare all agreements to arbitrate Ralph Act and Bane Act claims , regardless of their
actual terms, to be substantively unconscionable

. S uch a blanket
rule is not permitted under the FAA.
In Concepcion , the United Stat es 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.) A ccording to our nation’s high court

,

“ [a] n obvi ous illustration of this poin t 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 no29

consumer would knowingly waive his right to full discovery, as this would enable comp anies to hide their wrongdoing. Or the court might simply say that such agreements are exculpatory

— restricting discovery would be of greater benefit to the company than the consumer, since the former is more likely to be sued
than to sue. [Citation.] And, the reasoning would continue, because such a rule applies the general principle of unconscionability or public

- policy disapproval of exculpatory agreements, it is applicable to ‘any’ contract and th us preserved by § 2 of the FAA. In practice, of course, the rule would have a disproportionate impact on arbitration agreements

. . . .” ( Id

. at pp. 341

– 342. ) As such , it would be preempted by the FAA.
A declaration that all agreements to arbitrate Ralph Act
and Bane A ct claims are per se substantively unconscionable
would necessarily be premised o n the uniqueness of an agreement to arbitrate. Indeed, we could not reach such a

c onclusion without finding , for whatever reason, that it is inherently unfair to requir e a pa rty 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 adju dicating a n entire class of claims. S uch a
rule would itself represent a n improper hostility toward
arbitration that would n ot be permitted under the FAA.
E ven if the FAA permitted such a declaration

, section s 51.7’s and 52.1’s special requirements wou ld still be in consistent with the existing doctrine of unconscionability . First, by declaring unconscionable arbitration agreements that fail to comply with certain procedural requirement s , sections 51.7 and
52.1 preclude court s from performing the sliding scale a nalysis30

typically employed to determine whether a specific arbitration agreement is enforceable

. In addition, sections 51.7 and 52.1 alter the burden of proving unconscionability. Generally, the burden is on the part y opposing arbitration to show an arbitration agreement is unconscionable. ( Sanchez, supra

, 61 Cal.4th at p. 911 [“[b]ecause unconscionability is a contract defense, the party asserting the defense bears the burden of proof”]; Engalla v. Permanente Medical Group, Inc. (1997)
15 Cal.4th 951, 972 [“ a party opposing [a] petition [to arbitrate] bears the burden of proving by a preponderance of the evidence any fact necessary to its defense”]

. ) Section s 51.7 and 52.1, however, place the burden on the party seeking to enforce the
arbitration agreement to show it was made knowingly and voluntarily and not as a condition of the contract or of providing

or r eceiving goods or services. ( § 51.7

, subd. (b)(5).) I n effect

, this
shift s the burden to the party seeking enforcement to show that
the ar bitration agreement is not unconscionable. In that way,
section s 51.7 and 52.1 depart from the preexisting doctrine of unconscionability , and treat arbitration agreements di fferently
from other types of contracts. Such discriminato ry treatment is not per mitted under the FAA.
3. An Agreement to Arbitrate Ralph Act and Bane Act
Claims Does N

ot 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 avoi d 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 remedi es that are31

necessarily waived simply by submitting a Ralph Act or Bane Act
claim to arbitration. In passing, and without any explanation or citation to the record or authority, Saheli asserts the Arbitration Agreement precludes injunctive relief. Contra ry 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.”
W e 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.) Su ch concerns are addressed by Code of Civil Procedure section 1281.8, which provides that a party to an arbitration agreement may seek from a court a preliminary injunction or temporary restraining order if “the award to which the applicant may be entitled may be rendered ineffectual without provisional relief.” ( Code Civ. Proc., § 1281.8, subd. (b).)
Sah e li’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 I skanian , supra , 59 Cal.4th 348 (prohibiting the waiver of P AGA cl aims ) 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, the32

Arbitration Agreement does not mandate the waiver of any substantive rights or remedies. Nor has Saheli identified any
substantive rights or remedies necessarily waived by virtue of agreeing to arbitrate Ralph Act or Bane Act claims. Although Cour ts of A ppeal have relied on Iskanian to limi t

pre

- dispute agree m ents to arbitrate P AGA claims, ( s ee 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)

, t he reasoning e mployed 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 Ag ency declines to investigate the alleged violation or issue a citation. (See Lab. Code, § 2699.3. ) Accordingly, “ [b] ecause a PAGA plaintiff, whether suing solely on behalf of himself or herself or also on behalf of other employees, acts as a proxy for th e state only with the state’s acquiescence (see § 2699.3) and seeks civil penalties largely payable to the state via a judgment that will be binding on the state, a PAGA claim cannot be ordered to arbitration
without the state’

s consent.” ( Tanguilig v. Bl oomingdale’ s, Inc.

, supra , 5 Cal.App.5th at p. 678

. )33 An action by an individual asserting Ralph Act and Bane
Act claims is fundamentally different from a PAGA action. Although the government has the authority to pursue Ralph Act and Bane Act claims, an aggrieved individual asserting such
claims does not act as a proxy for the state . Instead, the
individual pursues the claims “in his or her own name and on his or her own behalf . . . .” (§ 52.1, subd. (b).) In addition, unlike PAGA, the Ralph Act and B ane Act do not require that an individual provide the state notice of her claims and the opportunity to pursue them in the first instance. We are also
aware of no authority providing that the state is a real party in interest in individual Ralph Act or Ba ne Act claims

. Given such
fundamental differences between PAGA and the Ralph Act and Bane Act, Iskanian do es not compel a finding that section s 51.7’s
and 52.1’s restrictions on arbitration agreements avoid FAA preemption.
DISPOSITION
The order denying in part Defendant s’ 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.Saheli v. White Memorial Medical et al.

– B283217

RUBIN, J.

– Concurring:

I concur primarily under the compulsion of DIRECTV, Inc. v. Imburgia (2015) 136 S.Ct. 463 ( Imbrugia ). 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 elimin ating 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.,
B urchell 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.”].
T he 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 ).

1 The right to a jury trial in civil cases is guaranteed, with certain exceptions, in the Seventh Amendment of the United States Constitution and article 1, section 16 of our state Constitution. (See Dimick v. Schiedt (1935) 293 U.S. 474; Shaw v. Superior Cour t (2017) 2 Cal.5th 983, 993

- 994.)2

There, the court addressed a contractual provision requiring arbitration of a relatively prosaic claim of whether sales tax could be charged for “free” cell phones. In the six years following AT&T Mobility, the United States Supreme Court alone has issued opinion af ter 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 Imbrugia, 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 i n 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

2 Several of the 12 United States Supreme Court decisions were short orders that vacated lower court opinions and remanded the cas es for consideration in light of AT&T Mobility. (See e.g . Sonic

- Calabasas A, Inc. v. Moreno (2011) 565 U.S. 973 [state Labor Code grievance procedure]; Affiliated Computer Servs. v. Fensterstock (2011) 564 U.S. 1001 [consumer class action involving studen t loan payments]; Cellco P’ship v. Litman (2011) 563 U.S. 971 [consumer class action against telephone company]; Branch Banking and Trust v. Gordon (2011) 565 U.S. 1031 [bank arbitration agreement]; Missouri Title Loans, Inc. v. Brewer (2011) 563 U.S. 971 [class action waiver in car loan dispute]; Sonic Auto., Inc. v. Watts (2011) 563 U.S. 971 [class action waiver3 But a road well

- traveled does not necessarily make the trip satisfying if mu ch is lost along the way. 3 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. (Civ. Code, §§ 51.7, 52.) The arbitral road that started with disputes over cell phone bills now includes hate crimes. 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
Victi mization, 2004

- 2015 <https://www.bjs.gov/content/pub/

in automobile purchase agreement]

3 With apologies to Robert Frost’s “A Road Not Taken,” an Australian poet, David Keig, once observed: “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).)

4 Writing in 1998, Justice Mosk said, “The Legislature enacted section 52.1 [the Bane Act] to stem a tide of hate crimes.” ( Jones v. Kmart Corp. (1998) 17 Cal.4th 329, 338.) Over the years the Legislature has strengthened the Ralph Act and the Bane Act, sending “a message that the Legislature and the state view civil hate crimes cases as seriously or more seriously than any other tort.” (Sen Subcom. on Admin of Justice, Rep. on Sen Bill No

. 98 (1991

- 1992 Reg. Sess.).)4

pdf/hcv0415.pdf> (as of March 13, 2018).) Hate conduct takes its toll not only on individual victims but also on whole
communities. 5 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 arse nal 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

5 “Hate crimes remain a festering and horrifying problem in the United States. This form of domestic terrorism is designed to intimidate whole communities on the basis of personal and immutable characteristics

– and can damage the very fabric of our society. Although there are laws on the books that help specifi cally deter hate crimes and protect their victims, significant gaps remain.” (NAACP

- Supported Hate Crimes Prevention Legislation Passes U.S. Senate (July 2009) <http://www.naacp.org/latest/naacp

- supported

- hate

- crimes

prevention

- legislation

- passes

- us

- senat e> (as of March 13, 2018).) Policy makers have recognized that hate conduct has significant adverse consequences for communities, not just individual victims. California’s hate crimes legislation provides “protection against the special harms [hate crime s] inflict on individual victims, their communities and society at large.” ( People v. MacKenzie (1995) 34 Cal.App.4th 1256, 1272. See In re Joshua H. (1993) 13 Cal.App.4th 1734, 1748, fn. 9 [Hate crimes are “more serious than conventional crimes,” and ha ve “a more debilitating effect on the victim and on members in the victim’s community than does conventional crime.”].)5

trials for Bane Act and Ralph Act violations without regard to whether the conduct is grievously violent or much less so. The majority al so 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 point s 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

stat e 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 st atutes imposed as a mandatory condition of entering into a contract for goods or services is deemed unconscionable. (Civ. Code, §§ 51.7, subd. (b)(4) & 52.1, subd. (i).) In my view, this statutory provision encompasses elements of both procedural and sub stantive unconscionability. Procedurally, a contract which requires the predispute waiver of rights or remedies as a condition of entering into a contract for goods or services may very well be adhesive and contain other elements of procedural unconsciona bility identified by our Supreme Court in Armendariz v. Foundation Health Psychcare Servs. (2000)

24 Cal.4th 83. Substantively, the Legislature has determined that protections against hate crimes are sufficiently compelling, and implicate important publi c 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 Act6

provide remedies

– to be pursued both by victimized individuals and by government agenc ies

– to rid our state of hate crimes and related conduct. For the Legislature to determine that it is “unconscionable, against public policy, and unenforceable” for one party to force a waiver of those rights and remedies on another as
a condition of ent ering into a contract for goods or services seems to be well within its power. 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 subs tantively 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 ci vil 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. (Civ. Code, § 51.7,
subd. (b)(4).) A Ralph Act violation justifies an award of exempl ary damages, civil penalties, and attorney’s fees. (Civ. Code, § 52, subd. (b).) Any person claiming to be aggrieved by such a violation may pursue a complaint with the Department of Fair Employment and Housing. (Civ. Code, § 52, subd. (f).) The
Bane A ct additionally provides for injunctive relief, and a violation of such an injunction may be criminally punished. (Civ. Code, § 52.1, subds. (b), (i).) Under the 2014 amendments, none of these remedies and procedures can be waived by a clause
inserted as a mandatory condition in a contract for goods or7

services. But only that part of the amendments which prevents such a waiver of the right to pursue a judicial remedy is here held unenforceable. In short, we are today holding that the California Legislat ure can rationally forbid an adhesive predispute waiver of exemplary damages, civil penalties, attorney fees, administrative complaints, and injunctive relief, but it cannot forbid an adhesive predispute waiver of the judicial remedy. The FAA prevents a s tate from treating arbitration more harshly than any other procedure; I do not believe it requires us to treat it more favorably than any other procedure. I observe, however, that in opposition to respondents’ petition to compel arbitration, appellant fai led 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 unavai ling 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 un conscionable 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 circumstanc es 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 the8

trial court and is not before us here. This is therefore not the proper case to addres s the issue further.

RUBIN, J.