Source: https://class-law.com/2010/10/04/second-district-compels-arbitration-of-individual-claims-in-a-class-action-where-arbitration-agreement-contained-an-unenforceable-class-arbitration-waiver/
Timestamp: 2019-04-25 00:27:01+00:00

Document:
[T]he arbitration agreement here … contains both a waiver of class action rights as well as a waiver of asserting any other claims or remedies in a representative capacity which would include assertion of rights under the Private Attorney General Act. As such, the arbitration agreement is tainted in its entirety and properly deemed unenforceable. Franco v. Athens Disposal Co., Inc., (2009) 171 Cal.App.4th 1277, 1301.
I agree to forego any right we each may have had to a jury trial on issues covered by this Policy, and forego any right to bring claims on a representative or class member basis.
The parties agreed that the Federal Arbitration Act would govern. Id. (citing 9 U.S.C. § 1 et seq.). And the agreement included a severability clause: “[T]he Arbitrator or a court may sever any part of the Policy procedures that do not comport with the Federal Arbitration Act.” Id. Plaintiff acknowledged the severability clause: “If a court or the Arbitrator finds any provision of this Policy unenforceable, that provision may be severed without affecting this agreement to arbitrate.” Id.
The Second District reserved, holding that plaintiff must arbitrate his individual claims, but not his representative claims. Id. *2. The parties did not dispute that the case was governed by the Federal Arbitration Act. (9 U.S.C. § 1 et seq.). Id. While the present appeal was pending, the United States Supreme Court held under the Federal Arbitration Act that arbitration is a matter of consent, not coercion; therefore, a party may not be compelled to submit to class arbitration unless there is a contractual basis for concluding the parties agreed to authorize class arbitration. Id. (citing Stolt-Nielsen S.A. v. AnimalFeeds International Corp., 130 S. Ct. 1758, 1773-76 (2010)). The parties conceded that they did not agree to authorize class arbitration; and they expressly waived any right to arbitrate on a class basis. Id.
But the court addressed the remaining question of whether plaintiff can be compelled to arbitrate his individual claims or whether the arbitration agreement is unenforceable as a whole. Id. *2. The trial court ruled the present arbitration agreement was unenforceable because it contained multiple defects–a class action waiver and a private attorney general capacity preclusion–and was thus permeated with an unlawful purpose within the meaning ofArmendariz v. Foundation Health Psychcare Services, Inc., 24 Cal. 4th 83, 113-25 (2000). In reaching that decision, the trial court followed Franco v. Athens Disposal Co., Inc., 171 Cal.App.4th 1277, 1301 (2009), in which the Court of Appeal considered a nearly identical arbitration agreement. The Second District disagreed with the opinion in Franco.
We are uncertain about the reasoning by which the Court of Appeal reached the conclusion the private attorney general capacity preclusion was invalid separate and apart from the class action waiver. To the extent the Court of Appeal presumed a Private Attorneys General Act claim could only be brought as a class action, the California Supreme Court has now held to the contrary. (Arias v. Superior Court (2009) 46 Cal. 4th 969, 975, 980-987; Amalgamated Transit Union, Local 1756, AFL-CIO v. Superior Court (2009) 46 Cal. 4th 993, 1005.) The present case has arisen in a different context given the subsequent decisions in Arias and Amalgamated Transit Union, Local 1756, AFL-CIO. Thus, the present case is different from Franco.
Moreover, we respectfully disagree with Franco to the extent it concluded the arbitration agreement contained multiple invalid provisions, rendering it unenforceable as a whole under Armendariz. We conclude the present arbitration agreement did not contain multiple defects within the meaning of Armendariz. Applying general rules of contract interpretation de novo (Victoria v. Superior Court (1985) 40 Cal.3d 734, 744; Maggio v. Windward Capital Management Co. (2000) 80 Cal.App.4th 1210, 1214-1215), we conclude the class arbitration waiver and the private attorney general capacity preclusion were part of a single provision intended to limit arbitration to an employee’s individual claims, “[B]oth you and [Professional Community Management, Inc.] forego and waive any right to join or consolidate claims in arbitration with others or to make claims in arbitration as a representative or as a member of a class or in a private attorney general capacity….” The arbitration policy simply states that in any arbitration with the employer, an employee may not join his or her claims with those of others nor assert claims as a representative for nonparty employees, under the Private Attorneys General Act or otherwise. [FN1] As noted above, the presence of that provision, even if invalid on state law grounds, would not invalidate the arbitration agreement as a whole. In Gentry, our Supreme Court held, “The presence of [an invalid] class arbitration waiver in an employee arbitration agreement … does not by itself ‘indicate a systematic effort to impose arbitration on an employee not simply as an alternative to litigation, but as an inferior forum that works to the employer’s advantage.’ ( [Armendariz, supra, 42 Cal.4th] at p. 124.)” (Gentry, supra, 42 Cal.4th at p. 466.) The presence of a provision limiting arbitration to individual rather than joined or representative claims did not present a basis upon which the trial court could conclude the present arbitration agreement was permeated by an unlawful purpose.
The Court of Appeal found it noteworthy that “defendant concedes the arbitration agreement does not require plaintiff to forego recovery of civil penalties under the Private Attorneys General Act.” Id.
Thus, the Second District reversed the trial court’s order denying defendant’s petition to compel arbitration and directed the trial court to enter an order granting the petition and directing arbitration of plaintiff’s individual but not representative claims. Id. *5.
Presiding Justice Paul Turner wrote the opinion for the court. Associate Justice Sandy R. Kriegler and Judge Kumar concurred.

References: v. 
 § 1
 § 1
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.