FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

SHANNON MCBURNIE; APRIL 

SPRUELL, 

Plaintiffs-Appellees, 

 v. 

RAC ACCEPTANCE EAST, LLC, 

Defendant-Appellant.

No. 22-16868 

D.C. No.

3:21-cv-01429-JD 

OPINION

Appeal from the United States District Court

for the Northern District of California

James Donato, District Judge, Presiding

Argued and Submitted October 4, 2023

San Francisco, California

Filed March 14, 2024

Before: William A. Fletcher, Richard C. Tallman, and 

Kenneth K. Lee, Circuit Judges.

Opinion by Judge W. Fletcher
2 MCBURNIE V. RAC ACCEPTANCE EAST, LLC

SUMMARY*

Public Injunctive Relief

The panel affirmed the district court’s denial of RAC 

Acceptance East, LLC’s motion to compel arbitration, and 

remanded for the district court to address named plaintiff 

April Spruell’s standing to challenge a $1.99 expedited 

payment fee.

The appeal arises from a putative class action alleging 

that two fees imposed by RAC, the owner and operator of 

retail stores that lease household and electronic items 

through rent-to-own contracts, violated California consumer 

protection laws. California’s McGill rule invalidates 

contractual agreements that waive the right to seek 

injunctive relief on behalf of the general public. See McGill 

v. Citibank, N.A., 2 Cal. 5th 945, 961-62 (2017). This court 

held in Blair v. Rent-A-Center, Inc., 928 F.3d 819 (9th Cir. 

2019), that RAC’s arbitration agreement was unenforceable 

under California’s McGill rule, that the invalid provision 

was not severable from the rest of the arbitration provision, 

and that California law was not preempted by the Federal 

Arbitration Act.

The panel held that Blair was not abrogated by the 

Supreme Court’s subsequent decision in Viking River 

Cruises, Inc. v. Moriana, 596 U.S. 639 (2022). Viking River

dealt with California Private Attorneys General Act claims, 

which are different from public injunction claims brought 

under the consumer protection statutes at issue in Blair and 

* This summary constitutes no part of the opinion of the court. It has 

been prepared by court staff for the convenience of the reader.
MCBURNIE V. RAC ACCEPTANCE EAST, LLC 3 

in this case. The panel therefore affirmed the district court’s 

denial of RAC’s motion to compel arbitration. 

RAC argued that plaintiffs’ claim for public injunctive 

relief was mooted by a Consent Decree that RAC entered 

into with the California Attorney General. The Consent 

Decree prohibited RAC from charging or listing a fee that it 

could not establish as a reasonable actual cost incurred by 

RAC. RAC argued that plaintiffs’ requested injunction 

against the $45 processing fee that RAC assessed as part of 

every new rent-to-own agreement would merely duplicate 

this relief. The panel held that the public injunction that 

plaintiffs sought would provide relief that was not addressed 

by the Consent Decree, and therefore affirmed the district 

court’s finding that the challenge to the $45 fee was not 

moot. 

RAC further argued that plaintiffs lacked standing to 

challenge the $1.99 expedited payment fee for every 

payment made via telephone because plaintiff Spruell 

conceded that she did not actually pay the $1.99 

fee. Because the district court did not address the issue in its 

order denying RAC’s motion to compel arbitration, the panel 

remanded for the district court to do so. 

COUNSEL

Robert F. Friedman, I (argued), Littler Mendelson PC, 

Dallas, Texas; Julie M. McGoldrick and Shannon R. Boyce, 

Littler Mendelson PC, Los Angeles, California; Kaitlyn M. 

Burke, Upbound Group Inc., Plano, Texas; Kevin Ranlett, 

Mayer Brown LLP, Washington, D.C.; Matthew G. Ball, 

K&L Gates LLP, San Francisco, California; Wai H. Wong 
4 MCBURNIE V. RAC ACCEPTANCE EAST, LLC

and Caitlin C. Blanche, K&L Gates LLP, Irvine, California; 

for Defendant-Appellant. 

Michael Rubin (argued), Connie K. Chan, and Christine M. 

Salazar, Altshuler Berzon LLP, San Francisco, California; 

James T. Hannink and Zachariah P. Dostart, Dostart Hannink 

LLP, La Jolla, California; for Plaintiffs-Appellees. 

Peter B. Rutledge, University of Georgia School of Law, 

Athens, Georgia; Jennifer B. Dickey and Jordan L. Von 

Borken, United States Chamber Litigation Center, 

Washington, D.C.; Deborah R. White, Retail Litigation 

Center Inc., Washington, D.C.; Stephanie A. Martz, National 

Retail Federation, Washington, D.C.; for Amici Curiae 

Chamber of Commerce of the United States of America, 

Retail Litigation Center Inc., and National Retail Federation. 

OPINION

W. FLETCHER, Circuit Judge: 

Plaintiffs brought a putative class action alleging that 

defendant RAC Acceptance East, LLC (“RAC”) charged 

two fees that violated California consumer protection laws. 

After more than a year of discovery and multiple rounds of 

settlement negotiations, RAC moved to compel arbitration 

of the named plaintiffs’ claims. 

We held in Blair v. Rent-A-Center, Inc., 928 F.3d 819 

(9th Cir. 2019), that RAC’s arbitration agreement is 

unenforceable under California law, and that California law 

is not preempted by the Federal Arbitration Act (“FAA”). 

RAC argues that Blair was abrogated by the Supreme 

Court’s subsequent decision in Viking River Cruises, Inc. v. 
MCBURNIE V. RAC ACCEPTANCE EAST, LLC 5

Moriana, 596 U.S. 639 (2022). We disagree. We affirm the 

district court’s denial of RAC’s motion to compel 

arbitration. 

I. Factual and Procedural Background

RAC owns and operates retail stores that lease household 

and electronic items through rent-to-own contracts, under 

which the consumer rents an item, agrees to pay a set number 

of installments, and then takes ownership of the item once 

all payments are made. 

In 2017 and 2020, respectively, April Spruell and 

Shannon McBurnie each entered into rent-to-own 

agreements with RAC for furniture. They each paid a $45 

processing fee that RAC assessed as part of every new rentto-own agreement. Further, they each agreed to pay an 

additional $1.99 as an expedited payment fee for every 

payment made via telephone.

Spruell and McBurnie each signed RAC’s arbitration 

agreement, which provided that “in the event of any dispute 

or claim between us, either you or RAC may elect to have 

that dispute or claim resolved by binding arbitration.” In 

relevant part, the arbitration agreement also provided:

[N]either you nor RAC may seek, nor may 

the Arbitrator award, relief that would affect 

RAC account holders other than you. There 

will be no right or authority for any dispute to 

be brought, heard, or arbitrated as a class, 

collective, mass, private attorney general, or 

representative action.

California’s McGill rule invalidates contractual 

provisions that waive the right to seek injunctive relief on 
6 MCBURNIE V. RAC ACCEPTANCE EAST, LLC

behalf of the general public. See McGill v. Citibank, N.A., 2 

Cal. 5th 945, 961–62 (2017). In Blair, we considered the 

same RAC arbitration agreement as the agreement at issue 

here. We held that the agreement contained a provision that 

is unenforceable under McGill, and that the invalid provision 

is not severable from the rest of the arbitration agreement. 

Blair, 928 F.3d at 822. We also held that California’s McGill

rule is not preempted by the FAA. Id. 

Spruell and McBurnie filed a class action complaint on 

December 11, 2020, alleging that the $45 processing fee and 

$1.99 expedited payment fee are unlawful under several 

California consumer protection statutes—the Karnette 

Rental-Purchase Act, Cal. Civ. Code § 1812.620 et seq. 

(“Karnette Act”), the Consumers Legal Remedies Act, Cal. 

Civ. Code § 1750 et seq., and the Unfair Competition Law, 

Cal. Bus. & Prof. Code § 17200 et seq. They sought 

restitution and damages, statutory fines, attorneys’ fees and 

costs, and public injunctions prohibiting RAC from 

continuing to charge the contested fees.

From August 2021 to August 2022, the parties conducted 

discovery proceedings and participated in multiple 

settlement negotiations. In August 2022, RAC moved for 

the first time to compel arbitration of plaintiffs’ claims. 

RAC acknowledged in its motion that Blair prevented 

enforcement of the arbitration agreement. However, RAC 

argued that the Supreme Court’s June 2022 decision in 

Viking River implicitly abrogated Blair, allowing 

enforcement of RAC’s arbitration agreement. RAC also 

argued that the plaintiffs’ challenge to the $45 processing fee 

is moot because the California Attorney General had 

recently obtained an injunction that banned RAC from 

“[c]harging or listing a processing fee or any other fee that 

[RAC] cannot establish as reasonable and an actual cost 
MCBURNIE V. RAC ACCEPTANCE EAST, LLC 7

incurred by [RAC]” under the Karnette Act, thereby curing 

any injury arising out of the $45 processing fee. RAC further 

argued that plaintiff Spruell, the only plaintiff who claimed 

to have paid the $1.99 expedited payment fee, could not 

challenge the fee because she could not show that she in fact 

paid it.

The district court denied RAC’s motion. The court 

found that RAC waived its right to demand arbitration by 

actively litigating the case for over a year and a half before 

moving to compel. The court further held that even if RAC 

had preserved its right to arbitration, Viking River did not 

abrogate Blair, and that the injunction obtained by the 

California Attorney General did not moot plaintiffs’ request 

for public injunctive relief. The court did not address 

whether plaintiff Spruell had standing to challenge the $1.99 

fee charged for expedited telephone payments. We review 

these issues in turn. 

II. Enforcement of the Arbitration Agreement

RAC argues the district court erred in denying its motion 

to compel arbitration of plaintiffs’ claims, renewing its 

argument that the Supreme Court’s decision in Viking River

implicitly abrogated our holding in Blair. We have 

jurisdiction under 9 U.S.C. § 16(a)(1)(C). We review de 

novo. Kilgore v. KeyBank, Nat’l Ass’n, 718 F.3d 1052, 1057 

(9th Cir. 2013) (en banc).

A. Blair

Several California statutes, including those upon which 

plaintiffs rely, authorize public injunctions. A public 

injunction is a form of “injunctive relief that has the primary 

purpose and effect of prohibiting unlawful acts that threaten 

future injury to the general public.” McGill, 2 Cal. 5th at 
8 MCBURNIE V. RAC ACCEPTANCE EAST, LLC

951. The California Supreme Court held in McGill that state 

law prohibits contractual waivers of a party’s right to seek 

public injunctive relief. Id. at 952.

The FAA provides that arbitration agreements are “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. To determine whether the FAA preempts a 

state-law rule that would otherwise invalidate an arbitration 

agreement, we first ask whether the state-law rule is a 

“generally applicable contract defense[].” AT&T Mobility 

LLC v. Concepcion, 563 U.S. 333, 339 (2011). The FAA 

“permits agreements to arbitrate to be invalidated by 

‘generally applicable contract defenses, such as fraud, 

duress, or unconscionability,’ but not by defenses that apply 

only to arbitration or that derive their meaning from the fact 

that an agreement to arbitrate is at issue.” Id. (citation 

omitted).

If the relevant state-law rule is not a generally applicable 

contract defense, the FAA preempts the state-law rule and 

the arbitration agreement may be enforced. If, however, the 

state-law rule is a generally applicable contract defense, we 

ask whether the state-law rule nevertheless “stand[s] as an 

obstacle to the accomplishment of the FAA’s objectives.” 

Id. at 343. At this step, we consider the “fundamental 

attributes of arbitration” and ask whether the state-law rule 

“creates a scheme inconsistent” with those attributes. Id. at 

344. 

In Blair, we applied Concepcion’s preemption analysis 

to California’s McGill rule and held that the rule was not 

preempted by the FAA. We first determined that the McGill 

rule was a generally applicable contract defense, noting the 

rule “expresses no preference as to whether public injunction 
MCBURNIE V. RAC ACCEPTANCE EAST, LLC 9

claims are litigated or arbitrated,” but instead “merely 

prohibits the waiver of the right to pursue those claims in any 

forum.” Blair, 928 F.3d at 827. We noted that the McGill 

rule “derives from a general and long-standing prohibition 

on the private contractual waiver of public rights.” Id. 

We then asked whether the McGill rule impedes the 

FAA’s goal of enforcing arbitration agreements “according 

to their terms ‘so as to facilitate streamlined proceedings.’” 

Id. at 828 (citation omitted). We observed that claims for 

public injunctive relief require no special procedures and are 

brought by an individual plaintiff who “retains sole control 

over the suit.” Id. at 829. The McGill rule invalidates 

contractual provisions that completely waive the right to 

bring public injunctive claims, but it “leaves undisturbed an 

agreement that both requires bilateral arbitration and permits 

public injunctive claims.” Id. After deciding that the FAA 

does not preempt the McGill rule, we held in Blair that 

RAC’s arbitration agreement was unenforceable because it 

violated the McGill rule by including a provision that 

completely waived the right to seek public injunctive relief 

and that provision was not severable from the rest of the 

arbitration agreement. Id. at 831–32. 

In deciding that the FAA did not preempt the McGill 

rule, we relied on our prior decision in Sakkab v. Luxottica 

Retail N. Am., Inc., 803 F.3d 425, 432 (9th Cir. 2015), 

writing that “our decision in Sakkab all but decides this 

case.” Blair, 928 F.3d at 825. Sakkab involved an 

arbitration agreement that waived the right to bring 

representative claims on behalf of other employees under 

California’s Private Attorneys General Act (“PAGA”), Cal. 

Lab. Code §§ 2698 et seq. Sakkab, 803 F.3d at 427-28. 

PAGA “authorizes an employee to bring an action for civil 

penalties on behalf of the state against his or her employer 
10 MCBURNIE V. RAC ACCEPTANCE EAST, LLC

for Labor Code violations committed against the employee 

and fellow employees, with most of the proceeds of that 

litigation going to the state.” Iskanian v. CLS Transp. L.A., 

LLC, 59 Cal. 4th 348, 360 (2014). In Iskanian, the California 

Supreme Court held unenforceable contracts that 

categorically waived the right to bring PAGA claims. Id. 

The issue in Sakkab was whether the FAA preempted the 

Iskanian rule. We first determined that the Iskanian rule was 

a generally applicable contract defense because the rule 

“bars any waiver of PAGA claims, regardless of whether the 

waiver appears in an arbitration agreement or a nonarbitration agreement.” Sakkab, 803 F.3d at 432. We then 

determined that the Iskanian rule left “parties free to adopt 

the kinds of informal procedures normally available in 

arbitration.” Id. at 439. We therefore held in Sakkab that the 

FAA did not preempt the Iskanian rule. Id. 

B. Viking River

The Supreme Court’s decision in Viking River partially 

overruled Iskanian. There were two Iskanian-based statelaw rules before the Court in Viking River. The first was a 

rule prohibiting contractual waiver of the right to bring a 

“representative” PAGA claim in any forum. Viking River, 

596 U.S. at 662. The Court upheld that rule, writing, “[T]hat 

aspect of Iskanian is not preempted by the FAA.” Id.

The second Iskanian rule was a mandatory joinder rule 

that forbade dividing PAGA claims into individual and 

representative claims. Under PAGA, an employee with a 

single alleged Labor Code violation may “seek any civil 

penalties the state can, including penalties for violations 

involving employees other than the PAGA litigant herself.” 

Id. at 646–47 (quoting ZB, N.A. v. Superior Ct., 8 Cal. 5th 

175, 185 (2019)). Thus, “[t]he only way for parties to agree 
MCBURNIE V. RAC ACCEPTANCE EAST, LLC 11

to arbitrate one of an employee’s PAGA claims is to also 

‘agree’ to arbitrate all other PAGA claims in the same 

arbitral proceeding. The effect of Iskanian’s rule mandating 

this mechanism is to coerce parties into withholding PAGA 

claims from arbitration.” Id. at 661. Because individual and 

representative claims could not be divided, Iskanian 

effectively forbade waiver of the right to bring either such 

claim in court. The Court struck down Iskanian’s second 

rule, holding that the FAA prevented PAGA from insulating 

individual claims from arbitration in this manner. Id. at 662. 

C. Discussion

RAC argues that Viking River implicitly overrules not 

only Iskanian’s second rule, but also its first, and that, as a 

consequence, Blair no longer binds us. In general, “a panel 

opinion is binding on subsequent panels unless and until 

overruled by an en banc decision of this circuit” or “where 

‘intervening Supreme Court authority is clearly 

irreconcilable with our prior circuit authority.’” United 

States v. Easterday, 564 F.3d 1004, 1010–11 (9th Cir. 2009) 

(quoting Miller v. Gammie, 335 F.3d 889, 900 (9th Cir. 

2003)). The “clearly irreconcilable” requirement “is a high 

standard.” Rodriguez v. AT&T Mobility Servs. LLC, 728 

F.3d 975, 979 (9th Cir. 2013) (quoting Lair v. Bullock, 697 

F.3d 1200, 1207 (9th Cir. 2012)). “[I]f we can apply our 

precedent consistently with that of the higher authority, we 

must do so.” FTC v. Consumer Def., LLC, 926 F.3d 1208, 

1213 (9th Cir. 2019). 

RAC argues that Viking River is clearly irreconcilable 

with Blair. We disagree. Viking River is entirely consistent 

with Blair.

Viking River dealt with PAGA claims, which are 

different from public injunction claims brought under the 
12 MCBURNIE V. RAC ACCEPTANCE EAST, LLC

consumer protection statutes at issue in Blair and this case. 

In Viking River, the Supreme Court was concerned that 

PAGA’s mandatory joinder rule forced parties to resolve 

their individual PAGA disputes in court, thereby violating 

“the fundamental principle that ‘arbitration is a matter of 

consent.’” 596 U.S. at 659 (quoting Stolt-Neilsen S.A. v. 

AnimalFeeds Int’l Corp., 559 U.S. 662, 684 (2010)). But the 

mandatory joinder rule is specific to California’s PAGA 

statute. It does not exist under the consumer statutes at issue 

in Blair and in the case before us.

To state it another way, the only rule at issue in the case 

before us is the McGill rule. The McGill rule forbids a party 

to waive the right to seek a public injunction. The McGill 

rule is essentially the first Iskanian rule, which the Supreme 

Court explicitly upheld in Viking River. That rule forbids a 

party to waive the right to bring a representative claim in any 

forum. We held in Blair that the McGill rule is not 

preempted by the FAA. Far from overruling our holding in 

Blair, Viking River reaffirms it. 

We therefore affirm the district court’s denial of RAC’s 

motion to compel arbitration. We need not reach the other 

grounds urged by plaintiffs for affirming the district court’s 

decision.

III. Mootness and Standing

RAC argues that plaintiffs’ claim for public injunctive 

relief is mooted by the Consent Decree that RAC entered 

into with the California Attorney General. The Consent 

Decree prohibits RAC from “[c]harging or listing a 

processing fee or any other fee that [RAC] cannot establish 

as reasonable and an actual cost incurred by [RAC], as 

described [under the Karnette Act] in Civil Code section 

1812.624, subdivision (a)(7).” RAC argues that plaintiffs’ 
MCBURNIE V. RAC ACCEPTANCE EAST, LLC 13

requested injunction against the $45 processing fee would 

“merely duplicate[]” this relief. 

The district court rejected this argument, finding that 

“the $45 processing fee at issue here was not the focus of the 

California Attorney General’s investigation” and that 

plaintiffs are entitled to “seek public injunctive relief that is 

more concrete than merely reaffirming that RAC is required 

to abide by California law on rental-purchase agreements.” 

We agree. The Consent Decree did not determine whether 

the $45 processing fee in this case violates the Karnette Act’s 

requirement that fees be “reasonable” and that the fees 

represent an “actual cost” incurred by RAC. Thus, the public 

injunction that plaintiffs seek would provide relief that is not 

addressed by the Consent Decree. We affirm the district 

court’s finding that plaintiffs’ challenge to the $45 

processing fee is not moot.

RAC further argues plaintiffs lack standing to challenge 

the $1.99 expedited payment fee because, according to RAC, 

plaintiff Spruell has conceded that she did not actually pay 

the $1.99 fee. Plaintiffs may only invoke California’s 

McGill rule if they have standing and seek public injunctive 

relief in federal court. Stover v. Experien Holdings, Inc., 978 

F.3d 1082, 1087 (9th Cir. 2020). 

In her original complaint, Spruell alleged that she had 

“made several payments to [RAC] by telephone and was 

charged, and paid, a $1.99 fee each time.” In her deposition, 

she described making telephone payments that incurred the 

$1.99 fee. She provided no other evidence of having made 

those payments. When RAC asked, “What evidence do you 

have that you made a payment by phone in this case?” 

Spruell responded, “I don’t have no documents.” A few 

minutes later, RAC asked again, “You don’t have any 
14 MCBURNIE V. RAC ACCEPTANCE EAST, LLC

receipts showing that you ever paid an expedited payment 

fee of $1.99, right?” Spruell responded, “No, like how 

would I have a receipt?” In her written responses to RAC’s 

interrogatories, Spruell admitted that she does not have 

documents showing that she paid the $1.99 fee, and that she 

“cannot identify any witnesses who could show” that she 

paid the fee.

The district court did not address the issue of Spruell’s 

standing to challenge the $1.99 expedited payment fee in its 

order denying RAC’s motion to compel arbitration. We 

remand to allow the district court to do so. 

Conclusion

We AFFIRM in part and REMAND in part.