1

Filed 4/6/17

IN THE SUPREME COURT OF CALIFORNIA

SHARON MCGILL, )

)

Plaintiff and Respondent; )

)

) S224086

v. )

) Ct.App. 4/3 G049838

CITIBANK, N.A., )

) Riverside County

Defendant and Appellant. ) Super. Ct. No. RIC1109398

____________________________________)

In previous decisions, this court has said that the statutory remedies

available for a violation of the Consumers Legal Remedies Act (CLRA; Civ.

Code, § 1750 et seq.), the unfair competition law (UCL; Bus. & Prof. Code, § 

17200 et seq.), and the false advertising law (id., § 17500 et seq.) include public 

injunctive relief, i.e., injunctive relief that has the primary purpose and effect of 

prohibiting unlawful acts that threaten future injury to the general public. (Cruz v. 

PacifiCare Health Systems, Inc. (2003) 30 Cal.4th 303, 315-316 (Cruz); 

Broughton v. Cigna Healthplans (1999) 21 Cal.4th 1066, 1077 (Broughton).) The 

question we address in this case is the validity of a provision in a predispute

arbitration agreement that waives the right to seek this statutory remedy in any 

forum. We hold that such a provision is contrary to California public policy and is 

thus unenforceable under California law. We further hold that the Federal 

Arbitration Act (FAA; 9 U.S.C. § 1 et seq.) does not preempt this rule of 

California law or require enforcement of the waiver provision. We therefore 

reverse the judgment of the Court of Appeal.
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I. FACTUAL BACKGROUND

In 2001, plaintiff Sharon McGill opened a credit card account with 

defendant Citibank, N.A. (Citibank) and purchased a “credit protector” plan

(Plan). Under the Plan, Citibank agreed to defer or to credit certain amounts on 

McGill‟s credit card account when a qualifying event occurred, such as long-term 

disability, unemployment, divorce, military service, or hospitalization. Citibank 

charged a monthly premium for the Plan based on the amount of McGill‟s credit 

card balance.

McGill‟s original account agreement did not contain an arbitration 

provision. In October 2001, Citibank sent her a “Notice of Change in Terms 

Regarding Binding Arbitration to Your Citibank Card Agreement” (2001 Notice), 

which amended the original agreement by adding the following arbitration 

provisions: “Either you or we may, without the other‟s consent, elect mandatory, 

binding arbitration for any claim, dispute, or controversy between you and us 

(called „Claims‟).” “All Claims relating to your account or a prior related account, 

or our relationship are subject to arbitration, including Claims regarding the 

application, enforceability, or interpretation of this Agreement and this arbitration 

provision. All Claims are subject to arbitration, no matter what legal theory they 

are based on or what remedy (damages, or injunctive or declaratory relief) they 

seek. This includes Claims based on contract, tort (including intentional tort), 

fraud, agency, your or our negligence, statutory or regulatory provisions, or any 

other sources of law; . . . and Claims made independently or with other 

claims . . . . Claims and remedies sought as part of a class action, private attorney 

general or other representative action are subject to arbitration on an individual 

(non-class, non-representative) basis, and the arbitrator may award relief only on 

an individual (non-class, non-representative) basis.” “This arbitration provision is 

governed by the Federal Arbitration Act (the „FAA‟).” “Claims must be brought 

in the name of an individual person or entity and must proceed on an individual 

(non-class, non-representative) basis. The arbitrator will not award relief for or 
3

against anyone who is not a party. If you or we require arbitration of a Claim, 

neither you, we, nor any other person may pursue the Claim in arbitration as a 

class action, private attorney general action or other representative action, nor may 

such Claim be pursued on your or our behalf in any litigation in any court.”

The 2001 Notice stated that McGill had the option to decline the arbitration 

provision and to continue using her credit card under the existing terms until the 

“later” of “the end of [her] current membership year or the expiration date on [her] 

card(s).” McGill did not decline and, according to Citibank, the arbitration 

provision became effective on November 30, 2001.

In February 2005, Citibank sent McGill a “Notice of Change in Terms, 

Right to Opt Out, and Information Update” (2005 Notice), which informed her of 

changes to the arbitration provisions and to several other aspects of her account 

agreement. The 2005 Notice contained an opt-out provision similar to the opt-out 

provision in the 2001 Notice. Again, McGill did not opt out and continued using 

her credit card. In January 2007, Citibank sent McGill a complete copy of her 

account agreement, which included arbitration provisions identical to those quoted 

above. 

In 2011, McGill filed this class action based on Citibank‟s marketing of the 

Plan and the handling of a claim she made under it when she lost her job in 2008.

The operative complaint alleges claims under the UCL, the CLRA, and the false 

advertising law, as well as the Insurance Code. For relief, it requests, among other 

things, an injunction prohibiting Citibank from continuing to engage in its 

allegedly illegal and deceptive practices.

Pursuant to the arbitration provision, Citibank petitioned to compel McGill 

to arbitrate her claims on an individual basis. The trial court granted the petition 

in part and denied it in part based on Broughton and Cruz, which together 

established the following rule: Agreements to arbitrate claims for public 

injunctive relief under the CLRA, the UCL, or the false advertising law are not 

enforceable in California. Applying this rule — known as the Broughton-Cruz
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rule — the trial court ordered McGill to arbitrate all claims other than those for 

injunctive relief under the UCL, the false advertising law, and the CLRA. The 

Court of Appeal reversed and remanded “for the trial court to order all of McGill‟s 

claims to arbitration,” concluding that the FAA, as recently construed by the 

United States Supreme Court in AT&T Mobility LLC v. Concepcion (2011) 563 

U.S. 333 (Concepcion), preempts the Broughton-Cruz rule. 

During oral argument in the Court of Appeal, McGill asserted that the 

arbitration agreement is unenforceable because it purports to prohibit her from 

pursuing claims for public injunctive relief, not just in arbitration, but in any 

forum. The Court of Appeal did not mention this argument in its opinion. McGill 

made the argument again in a petition for rehearing, which the Court of Appeal 

denied without addressing the merits of the issue.

McGill filed a petition for review in this court, asserting (1) the Court of 

Appeal erred in finding FAA preemption of the Broughton-Cruz rule, and (2) the 

arbitration provision is invalid and unenforceable because it waives her right to 

seek public injunctive relief in any forum. For reasons explained below, we agree 

with her latter claim and we do not address the former.

II. DISCUSSION

We begin by summarizing the California consumer protection laws here at 

issue. The Legislature enacted the CLRA “to protect consumers against unfair and 

deceptive business practices and to provide efficient and economical procedures to 

secure such protection.” (Civ. Code, § 1760.) “[T]o promote” these purposes, the 

Legislature directed that the CLRA “be liberally construed and applied.” (Ibid.) 

After setting forth a list of unlawful “methods of competition and unfair or 

deceptive acts or practices” (id., § 1770), the CLRA authorizes any consumer who 

has been damaged by an unlawful method, act, or practice to bring an action for 

various forms of relief, including “[a]n order enjoining the methods, acts, or 

practices” (id., § 1780, subd. (a)(2)). The CLRA also expressly declares that 
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“[a]ny waiver by a consumer” of the CLRA‟s provisions “is contrary to public 

policy and shall be unenforceable and void.” (Id., § 1751.)

The UCL addresses “unfair competition,” which “mean[s] and include[s] 

any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, 

untrue or misleading advertising and any act prohibited by [the false advertising 

law].” (Bus. & Prof. Code, § 17200.) Its purpose “is to protect both consumers 

and competitors by promoting fair competition in commercial markets for goods 

and services.” (Kasky v. Nike, Inc. (2002) 27 Cal.4th 939, 949.) “Actions for 

relief” under the UCL may be brought by various government officials and “by a

person who has suffered injury in fact and has lost money or property as a result of 

the unfair competition.” (Bus. & Prof. Code, § 17204.) “[T]he primary form of 

relief available under the UCL to protect consumers from unfair business practices 

is an injunction.” (In re Tobacco II Cases (2009) 46 Cal.4th 298, 319.) In this 

regard, the UCL provides: “Any person who engages, has engaged, or proposes to 

engage in unfair competition may be enjoined in any court of competent 

jurisdiction. The court may make such orders or judgments . . . as may be 

necessary to prevent the use or employment by any person of any practice which 

constitutes unfair competition, as defined in this chapter, or as may be necessary to 

restore to any person in interest any money or property, real or personal, which 

may have been acquired by means of such unfair competition.” (Bus. & Prof. 

Code, § 17203.) 

The false advertising law makes unlawful “untrue or misleading” 

statements designed to “induce the public to enter into any obligation” to purchase 

various goods and services. (Bus. & Prof. Code, § 17500.) Like the UCL, the 

false advertising law allows an action for relief to be brought by specified 

government officials and “by any person who has suffered injury in fact and has 

lost money or property as a result of a violation.” (Bus. & Prof. Code, § 17535.) 

It also authorizes injunctive relief, stating: “Any person, corporation, firm, 

partnership, joint stock company, or any other association or organization which 
6

violates or proposes to violate this chapter may be enjoined by any court of 

competent jurisdiction. The court may make such orders or judgments . . . as may 

be necessary to prevent the use or employment by any person, corporation, firm, 

partnership, joint stock company, or any other association or organization of any 

practices which violate this chapter, or which may be necessary to restore to any 

person in interest any money or property, real or personal, which may have been 

acquired by means of any practice in this chapter declared to be unlawful.” (Ibid.) 

In Broughton and Cruz, this court discussed the nature of the injunctive 

relief available under these statutes. It distinguished between private injunctive 

relief — i.e., relief that primarily “resolve[s] a private dispute” between the parties 

(Broughton, supra, 21 Cal.4th at p. 1080) and “rectif[ies] individual wrongs” (id. 

at p. 1080, fn. 5), and that benefits the public, if at all, only incidentally — and 

public injunctive relief — i.e., relief that “by and large” benefits the general public 

(id. at p. 1079) and that benefits the plaintiff, “if at all,” only “incidental[ly]” 

and/or as “a member of the general public” (id. at p. 1080, fn. 5). For example,

the court explained in Broughton, an injunction under the CLRA against a 

defendant‟s deceptive methods, acts, and practices “generally benefit[s]” the 

public “directly by the elimination of deceptive practices” and “will . . . not 

benefit” the plaintiff “directly,” because the plaintiff has “already been injured, 

allegedly, by such practices and [is] aware of them.” (Ibid.) “[E]ven if a CLRA 

plaintiff stands to benefit from an injunction against a deceptive business practice, 

it appears likely that the benefit would be incidental to the general public benefit 

of enjoining such a practice.” (Ibid.) Likewise, the court explained in Cruz, an 

injunction under the UCL or the false advertising law against deceptive 

advertising practices “is clearly for the benefit of . . . the general public”; “it is 

designed to prevent further harm to the public at large rather than to redress or 

prevent injury to a plaintiff.” (Cruz, supra, 30 Cal.4th at pp. 315-316.) To 

summarize, public injunctive relief under the UCL, the CLRA, and the false 

advertising law is relief that has “the primary purpose and effect of” prohibiting
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unlawful acts that threaten future injury to the general public. (Broughton, supra,

at p. 1077.) Relief that has the primary purpose or effect of redressing or 

preventing injury to an individual plaintiff — or to a group of individuals similarly 

situated to the plaintiff — does not constitute public injunctive relief. 

As noted ante, Broughton and Cruz collectively established the following 

rule: Agreements to arbitrate claims for public injunctive relief under the CLRA, 

the UCL, or the false advertising law are not enforceable in California. As also 

noted ante, in the proceedings below, the parties and the courts focused on the 

effect of this rule on Citibank‟s petition to compel McGill to arbitrate her claims 

on an individual basis. The trial court applied the rule in declining to order 

arbitration of claims for injunctive relief under the UCL, the false advertising law, 

and the CLRA. The Court of Appeal, applying the high court‟s post-Cruz 

decisions, concluded that the rule was preempted by the FAA and ordered all 

claims to arbitration.

Although we granted review to consider the Court of Appeal‟s conclusion, 

it is now clear that the Broughton-Cruz rule is not at issue in this case. As detailed 

above, late in the Court of Appeal proceedings, McGill asserted that the arbitration

provision purports to preclude her from seeking public injunctive relief in any 

forum. She repeats that assertion in this court, citing the following clauses of the 

arbitration provision: (1) “[a]n award in arbitration shall determine the rights and 

obligations between the named parties only, and only in respect of the Claims in 

arbitration, and shall not have any bearing on the rights and obligations of any 

other person, or on the resolution of any other dispute”; (2) “[t]he arbitrator will 

not award relief for or against anyone who is not a party”; (3) “the arbitrator may 

award relief only on an individual (non-class, nonrepresentative) basis”; and (4) 

“neither you, we, nor any other person may pursue the Claims in arbitration as a 

class action, private attorney general action or other representative action.” At 

oral argument before us, Citibank agreed with McGill‟s reading of the arbitration 

provision. 
8

Given the parties‟ agreement, we do not independently analyze the 

arbitration provision, but proceed based on the parties‟ shared view that it purports 

to preclude McGill from seeking public injunctive relief in arbitration, in court, or 

in any forum. Because, as Citibank states, the parties “elected . . . to exclude 

public injunctive relief from arbitration,” the Broughton-Cruz rule — which 

applies only when parties have agreed to arbitrate requests for such relief — is not 

at issue, and we need not consider the rule‟s vitality in light of the high court‟s 

post-Cruz FAA decisions. Instead, the question before us is whether the 

arbitration provision is valid and enforceable insofar as it purports to waive 

McGill‟s right to seek public injunctive relief in any forum.

In answering this question, we first conclude that McGill‟s complaint does, 

in fact, appear to seek the type of public injunctive relief that Broughton and Cruz

identified. The UCL claim alleges in part that Citibank‟s “advertising and 

marketing” of the Plan “is unfair, deceptive, untrue and misleading” in various 

respects, and that Citibank “continue[s] to violate” the UCL by selling the Plan 

“with advertising that includes false, misleading or deceptive information, and 

material omissions.” For relief, it asks, among other things, for an order requiring 

Citibank “to immediately cease such acts of unfair competition and enjoining 

[Citibank] from continuing to conduct business via the unlawful, fraudulent or 

unfair business acts and practices complained of herein and from failing to fully 

disclose the true nature of its misrepresentations.”

The false advertising claim incorporates the allegations of the UCL claim 

and additionally alleges in part that Citibank “engaged in unfair, deceptive, untrue, 

and misleading advertising, relating to” the Plan, and “disseminated or caused to 

be disseminated materially untrue, and misleading advertising statements with the 

intent to either directly or indirectly induce members of the public . . . to purchase” 

the Plan. For relief, it requests, among other things, “injunctive relief.” 

The CLRA claim incorporates the allegations of the UCL and false 

advertising law claims and additionally alleges in part that Citibank made 
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“representations and omissions” about the Plan that “were false, deceptive and/or 

misleading,” and that Citibank “continue[s] to violate the CLRA by making 

misrepresentations and concealing material facts relating to” the Plan “and by 

selling the [P]lan based upon these misrepresentations and material omissions.” 

For relief, it requests, among other things, “injunctive relief.” 

More generally, the complaint‟s prayer for relief requests, among other 

things: (1) a declaration that Citibank violated the UCL, the false advertising law, 

and the CLRA by “disseminating . . . unfair, deceptive, or misleading advertising, 

and material omissions”; (2) “injunctive relief to ensure compliance with this 

section, pursuant to California Business & Professions Code sections 17200 et 

seq.” and “California Civil Code section 1750 et seq.”; (3) entry of an order 

requiring Citibank “to immediately cease the wrongful conduct as set forth above” 

and “enjoining” Citibank “from continuing to falsely advertise or conceal material 

information and conduct business via the unlawful and unfair business acts and 

practices complained of herein”; and (4) entry of a judgment “for injunctive 

relief.” In light of these allegations and requests for relief, which Citibank 

ignores, we disagree with Citibank that McGill has failed adequately to specify 

“the actual nature of the injunctive relief” she seeks or “to explain how the public 

at large would benefit from” that relief.1

We also disagree with Citibank that, because “McGill has not established 

that any of the alleged conduct she challenges is ongoing or likely to recur,” she 

“has failed to establish that the relief she seeks is, in fact, public injunctive relief.” 

As detailed ante, McGill alleges in her complaint that the conduct is ongoing. At 

this stage of the proceeding — a motion to compel arbitration — it is premature to 

 

1 As Citibank observes, McGill‟s complaint also requests compensatory, 

monetary and punitive damages, and “injunctive relief in the form of restitution 

and/or disgorgement.” These remedies do not constitute public injunctive relief

within the meaning of Broughton and Cruz. (Cruz, supra, 30 Cal.4th at pp. 317-

320; Broughton, supra, 21 Cal.4th at p. 1084.) 
10

consider whether she “has . . . established” these allegations with proof or how her 

failure to do so would ultimately affect her request for injunctive relief. (See 

Aguilar v. Avis Rent A Car System, Inc. (1999) 21 Cal.4th 121, 133 (plur. opn. of 

George, C. J.) [“The mere fact that a defendant refrains from unlawful conduct 

during the pendency of a lawsuit does not necessarily preclude the trial court from 

issuing injunctive relief to prevent a posttrial continuation of the unlawful 

conduct.”]; Robinson v. U–Haul Co. of California (2016) 4 Cal.App.5th 304, 315 

[“[T]here is no hard-and-fast rule that a party‟s discontinuance of illegal behavior 

makes injunctive relief . . . unavailable. „While voluntary cessation of conduct 

may be a factor in a court‟s exercise of its equitable jurisdiction to issue an 

injunction, it is not determinative.‟ ”].) In arguing otherwise, Citibank, quoting 

Green Tree Financial Corp.-Ala. v. Randolph (2000) 531 U.S. 79, 91, asserts that 

“ „the party resisting arbitration bears the burden of proving that the claims at issue 

are unsuitable for arbitration.‟ ” But Citibank cites no authority — and we are 

aware of none — applying this principle, which governs an effort to resist 

arbitration of a claim the parties agreed to arbitrate, to an effort to pursue a claim 

the parties excluded from arbitration.

We next address the following threshold issue: whether post-Cruz

amendments to the UCL and the false advertising law eliminated the ability of 

private plaintiffs like McGill to seek public injunctive relief under those laws.

2 

Before 2004, these statutes authorized action by “any person acting for the 

interests of itself, its members or the general public.” (Bus. & Prof. Code, former 

§ 17204, as amended by Stats. 1993, ch. 926, § 2, p. 5198 [UCL]; id., former § 

 

2 We invited the parties and amicus curiae to submit supplemental briefs on 

this issue. Citibank‟s response, in addition to discussing the UCL and the false 

advertising law, added that public injunctive relief is unavailable in this case under 

the CLRA because the CLRA “does not apply to credit cards in the first place.” 

Because Citibank did not raise this issue in earlier briefing and it is outside the 

scope of our request for supplemental briefing, we decline to address it.
11

17535, as amended by Stats. 1972, ch. 711, § 1, p. 1299 [false advertising law].) 

In 2004, the voters, by passing Proposition 64, amended these statutes to provide

that private individuals may (1) file an action for relief only if they have “suffered 

injury in fact and [have] lost money or property as a result of” a violation (Bus. & 

Prof. Code, §§ 17204, 17535), and (2) “pursue representative claims or relief on 

behalf of others only if [they] meet[] [these] standing requirements . . . and 

compl[y] with Section 382 of the Code of Civil Procedure,” which relates to 

representative suits (id., §§ 17203, 17535). The amended statutes also specify that 

“these limitations do not apply to claims brought . . . by the Attorney General, or 

a[ny] district attorney, county counsel, city attorney, or city prosecutor in this 

state.” (Ibid.) In uncodified sections, Proposition 64 identified the “[f]il[ing] [of] 

lawsuits” by private attorneys “on behalf of the general public” as a misuse of the 

unfair competition laws (Prop. 64, § 1, subd. (b)(4), 4D West‟s Ann. Bus. & Prof.

Code (2008 ed.) foll. § 17203, p. 409, hereafter Annotated Code), and stated the 

voters‟ “intent . . . that only the California Attorney General and local public 

officials be authorized to file and prosecute actions on behalf of the general 

public” (id., § 1, subd. (f)).

We conclude that these provisions do not preclude a private individual who 

has “suffered injury in fact and has lost money or property as a result of” a 

violation of the UCL or the false advertising law (Bus. & Prof. Code, §§ 17204, 

17535) — and who therefore has standing to file a private action — from 

requesting public injunctive relief in connection with that action. A person who 

meets these requirements is “fil[ing]” the “lawsuit[]” or “action[]” on his or her 

own behalf, not “on behalf of the general public.” (Prop. 64, § 1, subds. (b)(4)), 

(f), Ann. Code, supra, at p. 409.) This remains true even if the person seeks, as 

one of the requested remedies, injunctive relief “the primary purpose and effect 

of” which is “to prohibit and enjoin conduct that is injurious to the general 

public.” (Broughton, supra, 21 Cal.4th at p. 1077.) We find nothing in the ballot 

materials for Proposition 64 suggesting that voters, in stating their intent “that only 
12

the California Attorney General and local public officials be authorized to file and 

prosecute actions on behalf of the general public” (Prop. 64, § 1, subd. (f), Ann. 

Code, supra, at p. 409), meant to preclude individuals who meet the standing 

requirements for bringing a private action from requesting such relief. On the 

contrary, the Attorney General‟s “Official Title and Summary” explained that, 

under Proposition 64, “if [an] individual was actually injured by, and suffered 

financial/property loss because of, an unfair business practice,” he or she could 

“sue” for “private enforcement of [the] unfair business competition laws.” (Voter 

Information Guide, Gen. Elec. (Nov. 2, 2004), official title and summary of Prop. 

64, p. 38.) As we have already noted ante, “an injunction” is “the primary form of 

relief available under the UCL to protect consumers from unfair business 

practices.” (In re Tobacco II Cases, supra, 46 Cal.4th at p. 319; see Clayworth v. 

Pfizer, Inc. (2010) 49 Cal.4th 758, 789 [ “[i]f a party has standing under” the UCL, 

“it may seek injunctive relief”].) 

For several reasons, we also conclude that a request for such relief does not 

constitute the “pursu[it]” of “representative claims or relief on behalf of others” 

within the meaning of Business and Professions Code sections 17203 or 17535, 

such that “compli[ance] with Section 382 of the Code of Civil Procedure” is 

required. First, reading the phrase “on behalf of others” (Bus. & Prof. Code, 

§§ 17203 or 17535) as referring to the general public would create conflict with 

other parts of Proposition 64. This reading would seem to authorize private 

individuals to proceed on behalf of the general public if they “compl[y] with 

Section 382 of the Code of Civil Procedure” (Bus. & Prof. Code, §§ 17203, 

17535), which would conflict with the voters‟ stated intent “that only the 

California Attorney General and local public officials be authorized to file and 

prosecute actions on behalf of the general public” (Prop. 64, § 1, subd. (f), Ann. 

Code, supra, at p. 409, italics added). We must, if possible, “harmonize all of the 

relevant provisions of” Proposition 64. (Spanish Speaking Citizens’ Foundation,

Inc. v. Low (2000) 85 Cal.App.4th 1179, 1227 [construing Prop. 103].) 
13

Second, we have held that the phrase “compl[y] with Section 382 of the 

Code of Civil Procedure” (Bus. & Prof. Code, §§ 17203, 17535) “imposes a 

requirement that the action be brought as a class action.” (Arias v. Superior Court

(2009) 46 Cal.4th 969, 978.) This requirement has never been imposed with 

regard to requests to enjoin future wrongful business practices that will injure the 

public, and we find nothing in the ballot materials for Proposition 64 suggesting an 

intent to link or restrict such relief to the class action context. Indeed, imposing 

this requirement would largely eliminate the ability of a private plaintiff to pursue 

such relief, because class certification requires “the existence of both an 

ascertainable class and a well-defined community of interest among the class 

members” (Washington Mutual Bank v. Superior Court (2001) 24 Cal.4th 906, 

913), and “ „the general public‟ . . . fails to meet” this requirement (Czap v. Credit 

Bureau of Santa Clara Valley (1970) 7 Cal.App.3d 1, 6). 

Supporting this conclusion is our 2000 decision in Kraus v. Trinity 

Management Services, Inc. (2000) 23 Cal.4th 116, 121, which explained that 

under the UCL‟s then-existing standing provision, not all actions “brought on 

behalf of absent persons by a private party” had to be “certified as a class action.” 

After noting that that standing provision authorized “ „[a]ny person acting for the 

interests of itself, its members or the general public‟ . . . [to] seek UCL relief on 

behalf of the general public,” we stated: “We use the term „representative action‟

to refer to a UCL action that is not certified as a class action in which a private 

person is the plaintiff and seeks disgorgement and/or restitution on behalf of 

persons other than or in addition to the plaintiff.” (Kraus, at p. 126, fn. 10, italics 

added.) It seems likely that when the voters, just a few years later in 2004, revised

the UCL‟s standing provisions to require “representative claims” to be brought as 

class actions (Bus. & Prof. Code, § 17203), they had in mind, not an action 

requesting public injunctive relief, but the kind of “ „representative action‟ ” we 

discussed in Kraus, i.e., “a UCL action that is not certified as a class action in 

which a private person is the plaintiff and seeks disgorgement and/or restitution 
14

on behalf of persons other than or in addition to the plaintiff.” (Kraus, at p. 126, 

fn. 10, italics added.)

Having determined that public injunctive relief remains a remedy available 

to private plaintiffs under the UCL and the false advertising law, as well as under 

the CLRA, we next conclude that the arbitration provision here at issue is invalid 

and unenforceable under state law insofar as it purports to waive McGill‟s 

statutory right to seek such relief. Civil Code section 3513 provides: “Any one 

may waive the advantage of a law intended solely for his benefit. But a law 

established for a public reason cannot be contravened by a private agreement.”

Consistent with this provision, we have explained that “a party may waive a 

statutory provision if a statute does not prohibit doing so [citation], the statute‟s 

„public benefit . . . is merely incidental to [its] primary purpose‟ [citation], and 

„waiver does not seriously compromise any public purpose that [the statute was] 

intended to serve‟ [citation].” (DeBerard Properties, Ltd. v. Lim (1999) 20 

Cal.4th 659, 668-669.) By definition, the public injunctive relief available under 

the UCL, the CLRA, and the false advertising law, as discussed in Broughton and 

Cruz, is primarily “for the benefit of the general public.” (Broughton, supra, 21 

Cal.4th at p. 1082; see Cruz, supra, 30 Cal.4th at p. 315.) Its “evident purpose,” 

the court said in Broughton, is “to remedy a public wrong,” “not to resolve a 

private dispute” (Broughton, at p. 1080), and any benefit to the plaintiff requesting 

such relief “likely . . . would be incidental to the general public benefit of 

enjoining such a practice.” (Id. at p. 1080, fn. 5.) Accordingly, the waiver in a 

predispute arbitration agreement of the right to seek public injunctive relief under 

these statutes would seriously compromise the public purposes the statutes were 

intended to serve. Thus, insofar as the arbitration provision here purports to waive 

McGill‟s right to request in any forum such public injunctive relief, it is invalid 

and unenforceable under California law.

Citibank does not argue that the waiver is valid under California law. 

Instead, it argues that a California rule precluding enforcement of the waiver 
15

would be preempted by the FAA. According to Citibank, the FAA requires 

enforcement of the arbitration provision “as written, regardless of what it says or 

implies about claims seeking public injunctive relief.” “[A] court,” Citibank 

asserts, “may not avoid the FAA by applying state-law rules of contract 

interpretation to limit the scope of an agreement to arbitrate.”

We reject Citibank‟s overbroad view of the FAA. As Citibank observes, 

the high court has stated that section 2 of the FAA requires courts to “place 

arbitration agreements on an equal footing with other contracts [citation] and [to] 

enforce them according to their terms.” (Concepcion, supra, 563 U.S. at p. 339.) 

However, the high court has qualified this statement by reference to “[t]he final 

phrase of § 2,” which is known as the FAA‟s “saving clause” and which “permits 

arbitration agreements to be declared unenforceable „upon such grounds as exist at 

law or in equity for the revocation of any contract.‟ ” (Concepcion, at p. 339.)

This clause, the high court has stated, “indicates” that Congress‟s “purpose” in 

enacting the FAA “was to make arbitration agreements as enforceable as other 

contracts, but not more so.” (Prima Paint v. Flood & Conklin (1967) 388 U.S. 

395, 404, fn. 12, italics added (Prima Paint).) Thus, arbitration agreements,

“[l]ike other contracts,” “may be invalidated by „generally applicable contract 

defenses, such as fraud, duress, or unconscionability.‟ ” (Rent-A-Center, West,

Inc. v. Jackson (2010) 561 U.S. 63, 68.) They may not, however, be invalidated 

“by defenses that apply only to arbitration or that derive their meaning from the 

fact that an agreement to arbitrate is at issue.” (Concepcion, at p. 339.)

The contract defense at issue here — “a law established for a public reason 

cannot be contravened by a private agreement” (Civ. Code, § 3513) — is a 

generally applicable contract defense, i.e., it is a ground under California law for 

revoking any contract. (Little v. Auto Stiegler, Inc. (2003) 29 Cal.4th 1064, 1079 

(Little) [“long-standing ground for refusing to enforce a contractual term is that it 

would force a party to forgo unwaivable public rights”].) It is not a defense that 

applies only to arbitration or that derives its meaning from the fact that an 
16

agreement to arbitrate is at issue. As explained above, a provision in any

contract — even a contract that has no arbitration provision — that purports to 

waive, in all fora, the statutory right to seek public injunctive relief under the 

UCL, the CLRA, or the false advertising law is invalid and unenforceable under 

California law. The FAA does not require enforcement of such a provision, in 

derogation of this generally applicable contract defense, merely because the 

provision has been inserted into an arbitration agreement. To conclude otherwise 

would, contrary to Congress‟s intent, make arbitration agreements not merely “as 

enforceable as other contracts, but . . . more so.” (Prima Paint, supra, 388 U.S. at 

p. 404, fn. 12.)

Our conclusion is consistent with the high court‟s statement that, “[b]y 

agreeing to arbitrate a statutory claim, a party does not forgo the substantive rights 

afforded by the statute; it only submits to their resolution in an arbitral, rather than 

a judicial, forum.” (Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.

(1985) 473 U.S. 614, 628.) This statement, this court has said, “is as much 

prescriptive as it is descriptive. That is, it sets a standard by which arbitration 

agreements and practices are to be measured, and disallows forms of arbitration 

that in fact compel claimants to forfeit certain substantive statutory rights.” 

(Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 

99-100.) Likewise, the high court has recently indicated that the FAA does not 

require enforcement of a provision in an arbitration agreement that “forbid[s] the 

assertion of certain statutory rights” or that “eliminates . . . [the] right to pursue [a]

statutory remedy.” (American Express Co. v. Italian Colors Restaurant (2013) 

570 U.S. __, __ [133 S.Ct. 2304, 2310-2311] (Italian Colors); see Mitsubishi 

Motors Corp., at p. 637, fn. 19 [“[I]n the event the [arbitration] and choice-of-law 

clauses operated in tandem as a prospective waiver of a party‟s right to pursue 

statutory remedies for antitrust violations, we would have little hesitation in 

condemning the agreement as against public policy.”].) Consistent with this 

principle, we have held that the FAA does not require enforcement of a provision 
17

in an arbitration agreement that, in violation of generally applicable California 

contract law, “limit[s] statutorily imposed remedies such as punitive damages and 

attorney fees.” (Armendariz, at p. 103.) Here, we likewise conclude that the FAA 

does not require enforcement of a provision in a predispute arbitration agreement 

that, in violation of generally applicable California contract law, waives the right 

to seek in any forum public injunctive relief under the UCL, the CLRA, or the 

false advertising law.

Citibank argues that the above principles apply only when enforcement of 

an arbitration agreement would lead to forfeiture of a federal statutory right. This 

is so, Citibank asserts, because only federal statutes “stand on equal footing with 

and therefore modify the FAA, whereas a state law that is in conflict with federal 

law is preempted by the FAA.” 

Citibank‟s argument is inconsistent with high court authority. In Preston v. 

Ferrer (2008) 552 U.S. 346, 349-350, the high court held that the FAA preempts 

state laws that lodge in a judicial or administrative forum primary jurisdiction over 

claims the parties have agreed to arbitrate. In stating its reasoning, the court 

explained in part: “[I]t bears repeating that [the petition to arbitrate] presents

precisely and only a question concerning the forum in which the parties‟ dispute 

will be heard. [Citation.] „By agreeing to arbitrate a statutory claim, a party does 

not forgo the substantive rights afforded by the statute; it only submits to their 

resolution in an arbitral . . . forum.‟ [Citation.] So here, [the party resisting 

arbitration] relinquishes no substantive rights the [California Talent Agencies Act]

or other California law may accord him. But under the contract he signed, he 

cannot escape resolution of those rights in an arbitral . . . forum.‟ ” (Preston, at p. 

359.) This discussion would make no sense if, as Citibank asserts, the fact an 

arbitration agreement purports to waive a substantive right under state law were 

irrelevant to whether the FAA requires the agreement‟s enforcement. 

More fundamentally, Citibank‟s argument misunderstands the nature of the 

FAA‟s saving clause. As noted above, that clause provides that an arbitration 
18

agreement may be declared unenforceable “upon such grounds as exist at law or in 

equity for the revocation of any contract.” (9 U.S.C. § 2.) The high court has 

explained that this clause “explicitly retains an external body of [state] law 

governing revocation.” (Arthur Andersen LLP v. Carlisle (2009) 556 U.S. 624, 

630.) Under it, “ „[s]tate law‟ . . . is applicable to determine which contracts are 

binding . . . and enforceable under” the FAA, “ „if that law arose to govern issues 

concerning the validity, revocability, and enforceability of contracts generally.‟ ” 

(Arthur Andersen, at pp. 630-631.) As previously explained, the contract defense 

to the waiver at issue here — “a law established for a public reason cannot be 

contravened by a private agreement” (Civ. Code, § 3513) — is a “ground[]” that 

“exist[s]” under California law “for the revocation of any contract.” (9 U.S.C. § 2; 

see Little, supra, 29 Cal.4th at p. 1079.) Thus, applying this defense to invalidate 

the waiver does not “modify the FAA,” as Citibank asserts; it implements the FAA 

as written.

Supporting this analysis is the high court‟s decision in Concepcion, a 

decision on which Citibank heavily relies. There, the high court held that the FAA 

preempts the California rule, announced by a majority of this court in Discover 

Bank v. Superior Court (2005) 36 Cal.4th 148 (Discover Bank), that certain 

waivers of classwide arbitration procedures are unconscionable and unenforceable. 

(Concepcion, supra, 563 U.S. at p. 352.) In announcing this rule, the Discover 

Bank majority held that the rule is permissible under the FAA‟s saving clause 

because it is simply a specific application of the following “principle of California 

law that” governs “contracts generally”: “class action waivers are, under certain 

circumstances, unconscionable as unlawfully exculpatory.” (Discover Bank, at p. 

165.) Were Citibank‟s argument correct, the high court, in finding preemption, 

would have simply said that generally applicable principles of state contract law 

may never overcome the FAA‟s requirement that arbitration agreements be 

enforced according to their terms. Instead, the high court reaffirmed that the

“saving clause permits agreements to arbitrate to be invalidated by „generally 
19

applicable contract defenses‟ ” under state law (Concepcion, at p. 339), and the 

court looked specifically to “California law” on unconscionability in first 

evaluating the Discover Bank rule‟s validity (Concepcion, at p. 340). The court

then added that the FAA preempts even a “generally applicable” state law contract 

defense if that defense (1) is “applied in a fashion that disfavors arbitration” 

(Concepcion, at p. 341), or (2) “interferes with fundamental attributes of 

arbitration” (id. at p. 344), such as “ „lower costs, greater efficiency and speed, and 

the ability to choose expert adjudicators to resolve specialized disputes‟ ” (id. at p.

348). The Discover Bank rule fails the latter test, the high court held, because by 

requiring a class arbitration procedure, the rule (1) “sacrifices” arbitration‟s 

“informality” (Concepcion, at p. 348), (2) “makes the process slower, more costly, 

and more likely to generate procedural morass than final judgment” (ibid.), (3) 

“requires procedural formality” (id. at p. 349), and (4) “greatly increases risks to 

defendants” (id. at p. 350). 

Citibank argues that the antiwaiver rule at issue here interferes with the 

fundamental attributes of arbitration in the same way as the Discover Bank 

antiwaiver rule regarding class procedures. “As a practical matter,” Citibank 

asserts, “there is little difference between broad-based public injunctions and the 

class-wide relief at the heart of” the Discover Bank rule that Concepcion 

invalidated. “Neither is necessary nor intended to protect an individual‟s rights; 

rather, both aim to provide relief on behalf of others that are not parties to the 

proceeding in question. Both necessarily transform arbitration from a procedure 

involving distinct parties into a procedure involving and/or affecting numerous 

other unknown persons, with the stakes in public injunctive relief actions often 

just as great as the stakes in class actions.” Moreover, “broad-based injunctive 

relief and class actions both impose procedures in addition to the arbitration itself. 

These violate the FAA”s „prime objective‟ of „streamlined proceedings and 

expeditious results.‟ ” Thus, Citibank asserts, no basis exists “to draw a 

distinction between class claims and public injunctions.” 
20

For several reasons, Citibank‟s argument fails. First, contrary to Citibank‟s 

assertion, Concepcion and its high court progeny actually support the “draw[ing]” 

of “a distinction between class claims and public injunctions.” The latter is a 

substantive statutory remedy that the Legislature, through the UCL, the CLRA, 

and the false advertising law, has made available to those, like McGill, who meet 

the statutory standing requirements for filing a private action. A class action, by 

contrast, “is a procedural device that enforces substantive law by aggregating 

many individual claims into a single claim . . . . It does not change that 

substantive law.” (In re Tobacco II Cases, supra, 46 Cal.4th at p. 313, italics 

added; see Deposit Guaranty Nat. Bank, Jackson, Miss. v. Roper (1980) 445 U.S. 

326, 332 [right to use federal class action procedure “is a procedural right only, 

ancillary to the litigation of substantive claims”].) In Italian Colors, supra, 570 

U.S. at page __ [133 S.Ct. at p. 2312], the high court, drawing on Concepcion, 

held that the FAA requires enforcement of an arbitration provision that precludes 

class arbitration of federal antitrust claims. In reaching this conclusion, the court 

distinguished between the “ „waiver of a party‟s right to pursue statutory

remedies‟ ” — such as “a provision in an arbitration agreement forbidding the 

assertion of certain statutory rights” (Italian Colors, at pp. ____ [133 S.Ct. at pp. 

2307, 2310], italics added) — and the waiver of a “procedural path to the 

vindication of every claim” — such as a provision forbidding class action 

arbitration (id. at p. __ [133 S.Ct. at p. 2309], italics added). Even though a class 

arbitration waiver may make the statutory remedy “not worth the expense” of 

pursuing, because the waiver does “not constitute the elimination of the right to 

pursue that remedy,” the FAA requires its enforcement. (Italian Colors, at p. __ 

[133 S.Ct. at p. 2307].) Under Italian Colors, because the waiver at issue here is a 

waiver of the right to pursue statutory remedies — rather than of a procedural 

path to vindicating the statutory claim — it is, contrary to Citibank‟s assertion, 

distinguishable from a waiver of class procedures.
21

Second, invalidation of the waiver will not, as Citibank asserts, interfere 

with any of arbitration‟s attributes. “Arbitration under the [FAA] is a matter of 

consent, not coercion, and parties . . . may limit by contract the issues [that] they 

will arbitrate.” (Volt Info. Sciences v. Leland Stanford Jr. U. (1989) 489 U.S. 468, 

479.) The FAA “does not . . . prevent parties who . . . agree to arbitrate from 

excluding certain claims from the scope of their arbitration agreement.” (Id. at p. 

478.) Here, the parties agree that they “elected in the Arbitration Agreement to 

exclude public injunctive relief [requests] from arbitration,” and we are not 

holding that McGill‟s requests for such relief must, contrary to the parties‟ 

agreement, be arbitrated. Moreover, case law establishes that a stay of 

proceedings as to any inarbitrable claims is appropriate until arbitration of any 

arbitrable claims is concluded. (Cruz, supra, 30 Cal.4th at p. 320.) Thus, 

arbitration of claims the parties have agreed to arbitrate may proceed pursuant to 

whatever procedures the arbitration agreement specifies, unaffected by any 

subsequent proceedings made necessary by invalidation of the waiver regarding 

the public injunctive relief claims the parties did not agree to arbitrate. According 

to the high court, “ „piecemeal‟ litigation” of claims the parties have agreed to 

arbitrate and claims they have not agreed to arbitrate is consistent with the FAA. 

(Dean Witter Reynolds Inc. v. Byrd (1985) 470 U.S. 213, 221.) In Broughton, 

supra, 21 Cal.4th at page 1088, this court extended this principle to piecemeal 

litigation of “arbitrable and inarbitrable remedies derived from the same statutory 

claim.” We therefore reject Citibank‟s assertion that “post-arbitration judicial or 

other procedures” to resolve requests for statutory relief the parties did not agree 

to arbitrate would “violate the FAA‟s objectives.” 

Our invalidation of the arbitration provision insofar as it purports to waive 

McGill‟s statutory right to seek public injunctive relief in any forum gives rise, 

under the terms of the parties‟ agreement, to the following question: Is the rest of 

the provision enforceable? The arbitration provision contained in the 2001 Notice 

stated: “If any portion of the arbitration provision is deemed invalid or 
22

unenforceable, the entire arbitration provision shall nevertheless remain in 

force.” (Italics added.) However, the arbitration provision set forth in the 2005 

Notice and the 2007 account agreement states: “If any portion of the arbitration 

provision is deemed invalid or unenforceable, the entire arbitration provision shall 

not remain in force.” (Italics added.) Because the parties have not mentioned, let 

alone discussed, this language, we do not decide whether, in light of our holding, it 

renders the remainder of the arbitration provision unenforceable. But because our 

holding raises this question, we need not detail each respect in which McGill‟s 

injunctive relief request constitutes a request for public injunctive relief. We leave 

these issues to the Court of Appeal on remand, should the parties raise them and 

should the court find it necessary to decide them.

III. DISPOSITION

The Court of Appeal‟s judgment is reversed and the matter is remanded for 

further proceedings consistent with this opinion.

CHIN, J.

WE CONCUR:

CANTIL-SAKAUYE, C. J.

WERDEGAR, J.

LIU, J.

CUÉLLAR, J.

KRUGER, J.

HALLER, J.*

_____________________________

* Associate Justice of the Court of Appeal, Fourth Appellate District, 

Division One, assigned by the Chief Justice pursuant to article VI, section 6 of the 

California Constitution.
See next page for addresses and telephone numbers for counsel who argued in Supreme Court.

Name of Opinion McGill v. Citibank, N.A.

__________________________________________________________________________________

Unpublished Opinion

Original Appeal

Original Proceeding

Review Granted XXX 232 Cal.App.4th 753

Rehearing Granted

__________________________________________________________________________________

Opinion No. S224086

Date Filed: April 6, 2017

__________________________________________________________________________________

Court: Superior

County: Riverside

Judge: John W. Vineyard, Temporary Judge*

__________________________________________________________________________________

Counsel:

Stroock & Stroock & Lavan, Julia B. Strickland, Stephen J. Newman, David W. Moon and Marcos D. 

Sasso for Defendant and Appellant.

Horvitz & Levy, Lisa Perrochet, John F. Querio and Felix Shafir for Association of Southern California 

Defense Counsel as Amicus Curiae on behalf of Defendant and Appellant.

Deborah J. La Fetra for Pacific Legal Foundation as Amicus Curiae on behalf of Defendant and Appellant.

Leland Chan for California Bankers Association as Amicus Curiae on behalf of Defendant and Appellant.

Haynes and Boone and Mary-Christine Sungaila for International Association of Defense Counsel as 

Amicus Curiae on behalf of Defendant and Appellant.

Mayer Brown, Andrew J. Pincus, Archis A. Parasharami and Donald M. Falk for Chamber of Commerce of 

the United States of America as Amicus Curiae on behalf of Defendant and Appellant.

Capstone Law, Raul Perez, Melissa Grant, Glenn A. Danas, Ryan H. Wu, Liana Carter and Katherine W. 

Kehr for Plaintiff & Respondent.

Scott L. Nelson; Chavez & Gertler, Mark A. Chavez and Nance F. Becker for Public Citizen, Inc., as 

Amicus Curiae on behalf of Plaintiff and Respondent.

Barbara Jones for AARP as Amicus Curiae on behalf of Plaintiff and Respondent.

*Pursuant to California Constitution, article VI, section 21.
Counsel who argued in Supreme Court (not intended for publication with opinion):

Julia B. Strickland

Stroock & Stroock & Lavan

2029 Century Park East, Suite 1800

Los Angeles, CA 90067

(310) 556-5800

Glenn A. Danas

Capstone Law

1840 Century Park East, Suite 450

Los Angeles, CA 90067

(310) 556-4811