Filed 3/14/18

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION EIGHT

GEZEL SAHELI, 

Plaintiff and Respondent,

v.

WHITE MEMORIAL MEDICAL 

CENTER et al.,

Defendants and Appellants.

 B283217

 (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 Kiran 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

White Memorial Medical Center (White Memorial) and 

Juan Barrio, M.D. (together, Defendants) challenge the denial in 

part of their petition to compel arbitration of claims brought 

against them by Gezel Saheli, M.D. Although the trial court 

ordered Saheli to arbitrate 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 The court 

reasoned that the parties’ arbitration agreement failed to comply 

with special requirements for agreements to arbitrate such 

claims. Specifically, sections 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 contracts 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 

arbitration. Defendants contend (1) the trial court erred in its 

interpretation of the parties’ arbitration agreement and (2) the 

Ralph Act’s and Bane Act’s special requirements for arbitration 

agreements are preempted by the Federal Arbitration Act (FAA). 

We agree and reverse the trial court’s order denying Defendants’ 

petition to compel arbitration of Saheli’s Ralph Act and Bane Act 

claims. 

FACTUAL AND PROCEDURAL BACKGROUND

Complaint

Saheli filed her initial complaint against Defendants on 

February 21, 2017. In the operative First Amended Complaint, 

Saheli alleges she is a native of Iran and 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, she 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, in response to such reports, Barrio 

commenced a “campaign of retaliation, harassment, and 

intimidation” against her, which included yelling at her and 

threatening to terminate her. According to Saheli, a substantial 

motivating factor for the yelling was the fact that she is female. 

In addition, Saheli alleges Barrio made several slurs concerning 

her Iranian nationality as well 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 asserts nine causes of 

action against Defendants: (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 wrongful termination 

(Lab. Code, § 1102.5); (6) wrongful termination in violation of 

fundamental 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

Petition to Compel Arbitration

On April 3, 2017, Defendants filed a petition to compel 

Saheli to arbitrate all of her claims, relying on an arbitration 

agreement found in an employment/training agreement and 

employee handbook (Arbitration Agreement).

2 The Arbitration 

Agreement provides 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 provides that “[a]rbitration 

pursuant to this [Arbitration Agreement] shall be the exclusive 

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 “PostDoctoral Training Agreement,” which mandated that she 

challenge her termination 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 contained 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 described 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]laims for 

unemployment compensation, claims under the National Labor 

Relations Act, claims under PAGA [Private Attorney General 

Act], claims for workers’ compensation benefits, and any claim 

that is non-arbitrable under applicable state or federal law are 

not arbitrable under this [Arbitration Agreement].” 

Saheli opposed Defendants’ petition, arguing the 

Arbitration 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. Defendants countered that such requirements are

preempted by the FAA. 

The trial court granted the petition in part and compelled 

Saheli to arbitrate all her claims except those under the Ralph 

Act and Bane Act. The court found that, per the terms of the 

Arbitration Agreement, the parties agreed not to arbitrate claims 

that are not arbitrable under California law. It further 

determined that, pursuant to sections 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 Defendants failed 

to show the parties expressly agreed the Arbitration Agreement
6

was not a condition of entering into a contract for services, 

the court concluded the agreement is unenforceable with respect 

to the Ralph Act and Bane Act claims. The trial court declined to

consider whether these requirements are preempted by the FAA. 

Although not asserted as a defense by Saheli, the court proceeded 

to find the Arbitration Agreement is not unconscionable. It then 

compelled arbitration of Saheli’s non-Ralph Act and -Bane Act

claims. 

Defendants appealed. 

STANDARD OF REVIEW

Where, as here, the issues presented by a petition to compel 

arbitration involve only the interpretation of an arbitration 

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; Carlson 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) 215 Cal.App.4th 1460, 1468–1469.) 

DISCUSSION

I. The Parties Did Not Incorporate Preempted State 

Law into the Arbitration Agreement

Defendants assert the trial court erred in implicitly 

interpreting the Arbitration Agreement as incorporating state 

law that is preempted by federal law. We agree. 

The FAA3 “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.) Under these

principles, the parties “might choose to have portions of their 

contract governed by the law of Tibet, the law of prerevolutionary 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 [“even 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.” Defendants 

assert the phrase 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 found 
8

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 Defendants’ interpretation is correct, the 

question of arbitrability would additionally turn on whether 

those requirements are preempted by federal law. If preempted,

such requirements would not be incorporated into the Arbitration 

Agreement, and it would be irrelevant whether the Arbitration 

Agreement complies with them.5

Generally, when 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 TRB 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 

National 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 are 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 employee 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.4th 19: “ ‘ “The fundamental rules of 

contract interpretation are based on the premise that the 

interpretation of a contract 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 provisions, interpreted in their “ordinary and 

popular sense,” unless “used by the parties in a technical sense or 

a special meaning is given to them by usage” (id., § 1644), 

controls judicial interpretation. (Id., § 1638.)’ [Citations.] 

A [contract] provision 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 ambiguous in the abstract.” [Citation.]’ ” 

(TRB Investments, Inc. v. Fireman’s Fund Ins. Co, supra, at 

p. 27.) The United States Supreme 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, 136 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, and a contrary interpretation would itself be preempted by 

the FAA. In that case, the plaintiffs entered into service 

agreements with DIRECTV that contained arbitration 

agreements and waivers of class arbitration. (Id. at p. 466.) 

The agreements provided that if the “law of your state” makes 
10

waivers of class arbitration unenforceable, the entire arbitration

provision is unenforceable. At the time the parties entered into 

the agreements, California law would have made the class 

arbitration waivers unenforceable under what is 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 DIRECTV

in California state 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 agreements unenforceable. While the action was 

pending, the United States Supreme Court decided AT&T 

Mobility LLC v. Concepcion (2011) 563 U.S. 333 (Concepcion),

which concluded the FAA preempts the Discover Bank rule. 

In effect, this meant class arbitration waivers were now 

enforceable if contained in agreements governed by the FAA. 

Sometime thereafter, DIRECTV moved to compel arbitration of 

the plaintiffs’ claims. (Imburgia, supra, at p. 466.) 

Despite Concepcion’s invalidation of the Discover Bank 

rule, a California Court of Appeal denied 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.) Based 

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 

Appeal employed principles and reasoning not applicable to 
11

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 federal policy favoring arbitration.’ 

[Citation.] Thus, the Court of Appeal’s interpretation is preempted by the Federal Arbitration Act. [Citation.]” (Ibid.)6

In reaching this decision, the Supreme Court detailed 

numerous ways in which the Court of Appeal’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 phrase to be unambiguous: “Absent any indication in the 

contract that this language is meant to refer 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 laws 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 Court of Appeal 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 believed that the words 

‘law of your state’ included California law that then made classarbitration 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 invalidated. 

(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 latter differently than the United States 

Supreme Court interpreted the former. Like the phrase “ ‘law of 

your state,’ ” the phrase “applicable state . . . law” is not 

ambiguous and its ordinary meaning refers only to valid state 

law. (See Imburgia, supra, 136 S.Ct. at p. 469.) Saheli has not 

provided any reasoning or general principles of contract 

interpretation that would lead to a different interpretation.

7 Nor 

has she pointed us to any cases in which courts have interpreted 

similar language in the manner 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 distinguishable because 

there, the relevant restriction on arbitration had been declared

preempted prior to DIRECTV’s attempt to compel arbitration. 

Here, in contrast, there had been no judicial declaration that the 

relevant portions of the Ralph Act and Bane Act are preempted 

by the FAA when Defendants 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 the phrase “applicable state . . . law” includes California law 

that is preempted by the FAA. 
13

We do not find this distinction meaningful. In interpreting 

the phrase “applicable state . . . law,” we are not concerned with 

the parties’ or the trial court’s understanding of the state of

California law when Defendants first attempted 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 Agreement. (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].) Instead, we are 

concerned only with the meaning of the phrase “applicable 

state . . . law” as understood by the parties when they entered 

into the Arbitration Agreement. (§ 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 the 

FAA to the Extent They Condition the Enforceability 

of Arbitration Agreements on Compliance with 

Special Requirements Not 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 case 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 determining 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 began 

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 

provides 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, or 

position in a labor dispute. (§ 51.7, subd. (a).) Persons who 

violate section 51.7 are liable for 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 violation 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 denied the right 
15

provided by the Ralph Act. (§ 52, subd. (b)(2).) In addition to a 

civil action, an aggrieved individual may file a complaint with the 

Department of Fair Employment and Housing. (§ 52, subd. (f).) 

Ten years after enacting the Ralph Act, the 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.) Section 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, 32 

Cal.4th at p. 841.) In addition to damages, the 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 any 
16

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, and 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, forum, 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, any “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 providing 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 longstanding 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 resolution of disputes, 

its passage ‘was motivated, first and foremost, by a congressional 
17

desire to enforce agreements into which parties had entered.’ 

[Citation.]” (Volt, supra, 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 Associates, 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 reasons for doing so, 

(Iskanian v. CLS Transportation 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 Nursing, 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 it 
18

disfavors 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 arbitration 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 procedures 

in connection with claims brought under those acts. In effect, 

sections 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 agreed to 

arbitration, 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 are 

preempted by the FAA. Accordingly, the 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. 

Sections 51.7’s and 52.1’s special requirements for 

agreements to arbitrate Ralph Act and Bane Act claims do not

apply to contracts generally. For example, the party seeking to 

enforce a contract generally need not prove the other party 

knowingly agreed to each term contained in a written contract. 

(Randas v. YMCA 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. Benco 
19

Contracting & Engineering, Inc. (2001) 89 Cal.App.4th 1042, 

1049 [same].) Moreover, although mutual assent to a contract is 

essential, (§§ 1550, 1565), the party opposing enforcement of a 

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

involuntary. (Evid. Code, § 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 [defendant had 

burden of proving affirmative defense of duress].) It is also wellestablished that there is no general prohibition on contract terms

that are 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 enforceable according to its terms [citations] 

unless 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 law, 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) 234 Cal.App.4th 947, 956 [“waivers that 

are obtained 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 waivers of 

judicial forums and procedures in connection with Ralph Act and 

Bane Act claims—and consequently their limitations on the 
20

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 that the Ralph 

Act’s and Bane Act’s special requirements 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 analysis 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. HarvardWestlake 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, Analysis 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 

question 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 Appeal 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 criticizes the Harvard-Westlake 

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. Bill No. 

2617 (2013–2014 Reg. Sess.) April 25, 2014, p. 7.) 

The Assembly report 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 discovery practice 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 independent review of the 

arbitrator’s ruling unless 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.) The analysis 
22

concludes that, in part due to these supposed shortcomings, 

private arbitration is “controversial . . . 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 belief 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 connection 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 51.7’s and 52.1’s special 

requirements escape FAA preemption because they merely place 

restrictions on arbitration agreements and do not ban them

outright.

10 We disagree. It is well-established that a law need 

not prohibit entirely arbitration agreements to be 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 PreEmption Questions?,” an Assembly 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 there 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, pp. 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, 

notification, 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 notice, 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 certain 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 Defendants must 

show that “Congress intended to disrupt the statutory 

enforcement scheme” and “interfere with California’s ability to 

curb discriminatory violence.” The premises of Saheli’s argument 

are flawed. The FAA does not displace the Ralph Act and Bane 

Act. Nor does it interfere with their enforcement schemes or

California’s ability to curb discriminatory violence. 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 

sections 51.7 and 52.1 do not comport with this mandate, and are 

therefore preempted by the FAA. 
24

1. The Ralph Act’s And Bane Act’s Special Requirements 

Do Not Avoid Preemption by Virtue of their Application to 

the Waiver of Any Legal Right, Penalty, Remedy, Forum, or 

Procedure

Saheli contends that sections 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 

requirements 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), the United States Supreme Court rejected a similar 

argument to the one advanced by Saheli. In Southland, our 

nation’s high court reversed a California Supreme Court decision 

holding that Corporations Code section 31512 prohibits

arbitration of claims brought under the Franchise Investment 

Law. (See Keating v. Superior Court (1982) 31 Cal.3d 584, 596–

597.) Corporations Code section 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 reasoned 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 agreements in 

a manner consistent with federal law. Rather, such exceptions 
25

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 the 

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 Franchise Investment Law claims, it is 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. opn. 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, including but not limited to 

arbitration provisions, void as a matter of public policy.” (Ibid.) 

The majority rejected Justice Stevens’s argument, stating: 

“[T]he defense to arbitration found in the California Franchise 

Investment Law is not a ground that 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 state 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 

congressional intent to place arbitration 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 the declared policy 

requiring enforcement of arbitration agreements.” (Southland, 

supra, 465 U.S. at pp. 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 plaintiff’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 when 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. Sections 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.) Although sections 51.7 and 52.1 place the same 

restrictions on waivers of various other statutory rights, the 
27

statutes unquestionably disfavor arbitration as applied. 

(See Sanchez, 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 agreements equally 

applicable to the waiver 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. 16, fn. 11.) 

2. The Ralph Act’s And Bane Act’s Special Requirements 

Do Not Codify the Doctrine of Unconscionability 

Saheli suggests sections 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 refuse 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 bargaining power, the latter on 

‘ “overly harsh” ’ or ‘ “one-sided” ’ results. [Citation.] ‘The 

prevailing view is that [procedural and substantive 

unconscionability] 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 is 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 the 
28

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.4th 83, 114, abrogated on other grounds by Concepcion, 

supra, 563 U.S. 333.) 

Sections 51.7’s and 52.1’s special requirements for 

arbitration agreements are not simply a codification of the abovedescribed principles. Although the special requirements 

potentially reflect elements of procedural unconscionability, they 

say nothing about substantive unconscionability. Thus, to find 

that sections 51.7’s and 52.1’s prohibitions on the enforcement of

certain arbitration agreements codify existing rules of

unconscionability would require us to declare all agreements to 

arbitrate Ralph Act and Bane Act claims, regardless of their 

actual terms, to be substantively unconscionable. Such a blanket 

rule is not permitted under the FAA. 

In Concepcion, the United States 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.) According to our nation’s high court, 

“[a]n obvious illustration of this point 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 no 
29

consumer would knowingly waive his right to full discovery, as 

this would enable companies 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 thus 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 Act claims are per se substantively unconscionable

would necessarily be premised on the uniqueness of an 

agreement to arbitrate. Indeed, we could not reach such a 

conclusion without finding, for whatever reason, that it is

inherently unfair to require a party 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 adjudicating an entire class of claims. Such a 

rule would itself represent an improper hostility toward 

arbitration that would not be permitted under the FAA. 

Even if the FAA permitted such a declaration, sections

51.7’s and 52.1’s special requirements would still be inconsistent 

with the existing doctrine of unconscionability. First, by 

declaring unconscionable arbitration agreements that fail to 

comply with certain procedural requirements, sections 51.7 and 

52.1 preclude courts from performing the sliding scale analysis 
30

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 party 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”].) Sections 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 receiving goods or services. (§ 51.7, subd. (b)(5).) In effect, this

shifts the burden to the party seeking enforcement to show that 

the arbitration agreement is not unconscionable. In that way, 

sections 51.7 and 52.1 depart from the preexisting doctrine of 

unconscionability, and treat arbitration agreements differently 

from other types of contracts. Such discriminatory treatment is 

not permitted under the FAA. 

3. An Agreement to Arbitrate Ralph Act and Bane Act 

Claims Does Not 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 avoid 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 remedies that are 
31

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. Contrary 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.” 

We 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.) Such 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).)

Saheli’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 Iskanian, supra, 59 

Cal.4th 348 (prohibiting the waiver of PAGA claims) 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, the 
32

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 Courts of Appeal have relied on Iskanian to limit

pre-dispute agreements to arbitrate PAGA claims, (see 

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), the reasoning employed 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 Agency 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 the 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. Bloomingdale’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 Bane 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 Bane Act claims. Given such 

fundamental differences between PAGA and the Ralph Act and 

Bane Act, Iskanian does not compel a finding that sections 51.7’s 

and 52.1’s restrictions on arbitration agreements avoid FAA 

preemption. 

DISPOSITION

The order denying in part Defendants’ 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 nonarbitrable 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 eliminating 

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., 

Burchell 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.”]. 

The 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 Court (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 after 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 in 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 cases 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 student 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 waiver 
3

But a road well-traveled does not necessarily make the trip 

satisfying if much 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 

Victimization, 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 arsenal 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 

specifically 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-crimesprevention-legislation-passes-us-senate> (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 crimes] 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 have “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 also 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 points 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 

state 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 statutes 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 substantive 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 unconscionability 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 public 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 Act 
6

provide remedies – to be pursued both by victimized individuals 

and by government agencies – 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 entering 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 substantively 

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 civil 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 

exemplary 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 Act 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 or 
7

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 

Legislature 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 state 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 failed 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 unavailing 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 unconscionable 

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 circumstances 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 the 
8

trial court and is not before us here. This is therefore not the 

proper case to address the issue further.

RUBIN, J.