Opinion ID: 2570216
Heading Depth: 3
Heading Rank: 2

Heading: Gilmer v. Interstate/Johnson Lane Corp.

Text: Discover Bank and its amici curiae also argue that their position on FAA preemption is supported by language in Gilmer v. Interstate/Johnson Lane Corp. (1991) 500 U.S. 20, 111 S.Ct. 1647, 114 L.Ed.2d 26 ( Gilmer ). In that case, the court considered whether the Age Discrimination in Employment Act (ADEA; 29 U.S.C. § 621 et seq.) precluded arbitration of claims brought under that act. The court made clear that the inquiry was into congressional intent to preclude arbitration, discoverable through the language, legislative history, or through an `inherent conflict' between arbitration and the ADEA's underlying purposes. ( Gilmer, supra, 500 U.S. at p. 26, 111 S.Ct. 1647.) The Gilmer court rejected the argument that there was such an inherent conflict because of the supposed lack of collective action mechanisms in the New York Stock Exchange arbitration rules under which plaintiff's arbitration was being conducted. As the court stated: The NYSE rules ... provide for collective proceedings. [Citation.] But `even if the arbitration could not go forward as a class action or class relief could not be granted by the arbitrator, the fact that the [ADEA] provides for the possibility of bringing a collective action does not mean that individual attempts at conciliation were intended to be barred.' ( Gilmer, supra, 500 U.S. at p. 32, 111 S.Ct. 1647.) The above passage does not support Discover Bank's position. At most, the Gilmer court can be understood to mean that a party can still vindicate his or her rights under the ADEA even if no class action remedy is available. The ADEA is an employment discrimination statute in which large individual awards are commonplace. (See Carnahan, Removing the Scarlet A (Aug. 12, 2002) Forbes, at p. 78 [reporting that the median award in employee age discrimination suits is $269,000].) Under California law, classwide arbitration is only justified when gross unfairness would result from the denial of opportunity to proceed on a classwide basis. ( Keating, supra, 31 Cal.3d at p. 613, 183 Cal.Rptr. 360, 645 P.2d 1192.) Moreover, in Gilmer the plaintiff sought to use the supposed lack of a class action remedy as a reason for invalidating the entire arbitration agreement. In the present case, the enforceability of the arbitration agreement itself is not in question, only enforcement of the class action waiver. Gilmer's determination that the lack of class action remedies does not give rise to an inherent conflict between the ADEA and the FAA does not lend support to the proposition that the FAA categorically precludes states from enforcing arbitration-neutral rules that prohibit consumer class action waivers in some circumstances. [6]