Opinion ID: 1196210
Heading Depth: 1
Heading Rank: 5

Heading: clra injunction requests are arbitrable under california law.

Text: In adopting a constitutionally suspect construction of the CLRA, the majority violates a cardinal rule of statutory interpretation. If a statute is susceptible of two constructions, one of which will render it constitutional and the other unconstitutional in whole or in part, or raise serious and doubtful constitutional questions, the court will adopt the construction which, without doing violence to the reasonable meaning of the language used, will render it valid in its entirety, or free from doubt as to its constitutionality, even though the other construction is equally reasonable. [Citations.] The basis of this rule is the presumption that the Legislature intended, not to violate the Constitution, but to enact a valid statute within the scope of its constitutional powers. ( Miller v. Municipal Court (1943) 22 Cal.2d 818, 828, 142 P.2d 297.) Thus, we should not adopt a construction of the CLRA that renders it partially unconstitutional absent statutory language requiring that we do so. Because, as I explain below, the CLRA does not contain such language, I reject the majority's conclusion that agreements to arbitrate CLRA injunction requests are unenforceable under California law.
The majority correctly observes that California's public policy strongly favors enforcement of arbitration agreements. (Maj. opn., ante, 90 Cal.Rptr.2d at p. 339, 988 P.2d at p. 72.) Through enactment of a comprehensive statutory scheme regulating private arbitration ..., the Legislature has expressed a `strong public policy in favor of arbitration as a speedy and relatively inexpensive means of dispute resolution.' [Citations.] ( Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 9, 10 Cal.Rptr.2d 183, 832 P.2d 899 ( Moncharsh ).) More than 80 years ago, we explained that [t]he policy of the law in recognizing arbitration agreements and in providing by statute for their enforcement is to encourage persons who wish to avoid delays incident to a civil action to obtain an adjustment of their differences by a tribunal of their own choosing. ( Utah Const. Co. v. Western Pac. Ry. Co. (1916) 174 Cal. 156, 159, 162 P. 631.) Thus, California law, like federal law, establishes a presumption in favor of arbitrability. ( Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 971, 64 Cal.Rptr.2d 843, 938 P.2d 903 ( Engalla ).) The Legislature established this statutory presumption to overcome earlier judicial hostility to arbitration agreements. ( Vandenberg v. Superior Court (1999) 21 Cal.4th 815, 830, 88 Cal.Rptr.2d 366, 982 P.2d 229 ( Vandenberg ).) Perhaps the clearest and most unequivocal expression of this public policy favoring arbitration appears in Code of Civil Procedure section 1281. It declares that [a] written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract. This section establishes the fundamental policy of California's arbitration scheme: that arbitration agreements will be enforced in accordance with their terms.  ( Vandenberg, supra, 21 Cal.4th at p. 836, fn. 10, 88 Cal.Rptr.2d 366, 982 P.2d 229, original italics.) To implement this policy, Code of Civil Procedure section 1281.2 directs that, on petition, a court shall order arbitration if it determines that an agreement to arbitrate the controversy exists, unless it determines that one of only three specified exceptions applies: (1) the petitioner has waived the right to compel arbitration; (2) grounds exist for revoking the agreement; or (3) a party to the agreement is also a party to a pending legal proceeding with a third party that arises out of the same transaction, and a possibility exists of conflicting rulings on common legal or factual issues. Of course, the Legislature is free to establish additional exceptions to this statutory command. (Cf. Shearson, supra, 482 U.S. at p. 226, 107 S.Ct. 2332 [FAA's statutory mandate may be overridden by a contrary congressional command].) The question before us, then, is not whether we think arbitration of CLRA claims is a bad idea, but whether the Legislature has established an additional exception to Code of Civil Procedure sections 1281 and 1281.2 that precludes arbitration of CLRA claims, either in whole or in part. Moreover, in light of our strong public policy favoring arbitration and the statutes expressly reflecting that public policy, the burden of showing this intent should be on the party opposing arbitration. ( Shearson, supra, 482 U.S. at p. 227, 107 S.Ct. 2332.) I conclude that plaintiffs have not met, and cannot meet, this burden.
In concluding that the Legislature has established an exception to the courts' statutory duty to enforce arbitration agreements, the majority does not maintain that the language of the CLRA expressly creates an exception. On the contrary, the majority declares that the CLRA does not address the question of arbitrability directly.... (Maj. opn., ante, 90 Cal.Rptr.2d at p. 348, 988 P.2d at p. 80.) Nor does the majority assert that the CLRA's legislative history reveals a legislative intent to create an exception. Notably, the majority does not even consider this traditional indicator of legislative intent. Rather, adopting one aspect of the analysis federal courts apply in determining arbitrability under the FAA, the majority begins by asking whether there [is] an inherent conflict between arbitration and the CLRA. (Maj. opn, ante, 90 Cal. Rptr.2d at p. 342, 988 P.2d at p. 74.) Finding that such a conflict exists, at least as to injunctive relief, the majority then concludes that the Legislature must have intended to prohibit full enforcement of agreements to arbitrate CLRA claims. ( Id., 90 Cal.Rptr.2d at p. 346, 988 P.2d at p. 78.) For several reasons, I disagree. Initially, the majority does not explain what basis exists in California law for adopting the federal inherent conflict analysis, which essentially recognizes implied exceptions to the express statutory requirement that we enforce arbitration agreements. The majority cites no case where we have taken a similar approach in applying California's arbitration statutes. [2] Nor do Code of Civil Procedure sections 1281 and 1281.2, which state the only grounds for refusing to enforce an arbitration agreement, appear to authorize a judicial search for implied exceptions to their command. Given that the Legislature has expressly established a [statutory] presumption in favor of arbitrability ( Engalla, supra, 15 Cal.4th at p. 971, 64 Cal.Rptr.2d 843, 938 P.2d 903), we have no basis judicially to presume, as the majority does, that the Legislature did not intend to permit arbitration of CLRA injunction requests. [3] (Maj. opn, ante, 90 Cal.Rptr.2d at p. 345, 988 P.2d at p. 78.) In any event, even applying the inherent conflict analysis, because I reject the majority's two underlying premises, I also reject its conclusion that an agreement to arbitrate a CLRA injunction request is unenforceable. The majority's first premise is that a CLRA injunction does not ... resolve a private dispute but ... remed[ies] a public wrong. (Maj. opn., ante, 90 Cal.Rptr.2d at p. 344, 988 P.2d at p. 76.) Thus, in the majority's view, consumers requesting CLRA injunctive relief act merely as bona fide private attorney[s] general ( id. at p. 345, 988 P.2d at P. 77) who by and large reap no benefit from an injunction against deceptive practices of which they have already been victims. ( Id. at p. 344, 988 P.2d at p. 76.) The provisions of the CLRA indicate the Legislature does not share the majority's view. Under section 1780, only a damaged consumer has standing to file a CLRA claim seeking an order enjoining unlawful practices (or any other form of authorized relief). Moreover, the CLRA gives the damaged consumer complete control over the litigation. Thus, a CLRA plaintiff may decide not to request an injunction, or may abandon a request at any time, or may settle or dismiss the CLRA claim without obtaining injunctive relief. Of course, these litigation decisions would impact any public benefit of injunctive relief far more than would arbitration. The Legislature would not have given the CLRA plaintiff such unfettered control, and would not have so strictly limited standing to seek injunctive relief, had it viewed a CLRA injunction as only a public remedy that does not resolve a private dispute or benefit the individual CLRA plaintiff. Thus, the provisions of the CLRA belie the majority's conclusion that because CLRA plaintiffs act merely as private attorneys general insofar as they request injunctions, they may not agree to arbitrate that request. If they may decline to make the request or abandon it, then surely they can arbitrate it. Notably, applying the federal inherent conflict analysis the majority now adopts, the United States Supreme Court has twice relied on similar considerations in rejecting claims that the public nature of a particular remedy precluded enforcement of an arbitration agreement. In Mitsubishi the high court considered the argument that antitrust claims under the Sherman Act are not arbitrable because of `the pervasive public interest in enforcement of the antitrust laws.' ( Mitsubishi supra, 473 U.S. at p. 629, 105 S.Ct. 3346.) The court recognized that an antitrust claim `is not merely a private matter' and that an antitrust plaintiff `has been likened to a private attorney-general who protects the public's interest.' ( Id. at p. 635, 105 S.Ct. 3346.) It nevertheless concluded that relief under the Sherman Act `was conceived of primarily as a remedy for ... individuals,' explaining: [T]he antitrust cause of action remains at all times under the control of the individual litigant: no citizen is under an obligation to bring an antitrust suit [citation], and the private antitrust plaintiff needs no executive or judicial approval before settling one. ( Id. at p. 636, 105 S.Ct. 3346.) Six years later, the court again relied on an individual plaintiffs authority to settle[ ] ... without any [third party] involvement in rejecting an attack on an arbitration agreement based on an alleged inherent conflict between arbitration and the important public policies furthered by the Age Discrimination in Employment Act of 1967. ( Gilmer, supra, 500 U.S. at p. 28, 111 S.Ct. 1647.) Thus, that the Legislature gave the CLRA plaintiff unfettered control over litigation, including an injunction request, strongly suggests it designed the CLRA to resolve private disputes and provide remedies to the individual consumer, not to protect the public. Another CLRA provision reinforces this conclusion. Section 1752 declares that the CLRA's provisions and remedies are not exclusive, are in addition to any other procedures or remedies for any violation or conduct provided for in any other law, and do not limit any other statutory or any common law rights of the Attorney General or any other person to bring class actions. This section further suggests that the legislative focus of the CLRA was to provide remedies to the individual consumer; the Legislature envisioned that public protection would be achieved outside of the CLRA. The CLRA's legislative history supports this conclusion. Summaries and analyses of the CLRA emphasized its remedial purpose for the victimized consumer and said little about public protection. For example, the Legislative Counsel's Digest for the bill enacting the CLRA stated that the Act provides specific legal remedies for consumers who suffer damage as a result of an unlawful method, act, or practice. (Legis. Counsel's Dig, Assem. Bill No. 292, 2 Stats. 1970 (Reg.Sess.) Summary Dig, p. 223; see also Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 46, fn. 9, 77 Cal.Rptr.2d 709, 960 P.2d 513 [digests of Legislative Counsel are relevant to statutory interpretation].) Similarly, an analysis by the Assembly Committee on the Judiciary stressed that the CLRA's purpose was to provide consumers with remedies as against merchants because [n]o such remedies are presently available to the individual consumer in California law. (Assem. Com. on Judiciary, Analysis of Assem. Bill No. 292 (1970 Reg. Sess.) Apr. 20, 1970, p. 1, italics added; see also id. at p. 2 [The remedies available to the deceived consumer ... include damages, injunctive relief....].) Thus, the CLRA's provisions and legislative history indicate that the Legislature designed CLRA injunctive relief to resolve private disputes by providing a complete remedy to the individual consumer. The majority does not, and cannot, cite anything to support its contrary assertion that CLRA injunctions were explicitly designed for public protection. (Maj. opn, ante, 90 Cal. Rptr.2d at p. 346, 988 P.2d at p. 78.) Finally, besides the Legislature's evident intent, for two additional reasons I disagree with the majority that a CLRA injunction is only a public remedy that does not resolve private disputes or benefit the CLRA plaintiff. First, nothing prevents a CLRA plaintiff from requesting an injunction that merely prohibits a defendant from committing additional unlawful acts against that plaintiff, and only against that plaintiff. This type of limited order would not appear to be a public remedy at all. Second, given the list of practices the CLRA prohibits (see § 1770), a victimized consumer who continues to transact business with a CLRA defendant, either by choice or necessity, will often benefit from an order enjoining the defendant from committing the unlawful practice again. Under these circumstances, the public benefit of a CLRA injunction is only incidental (or, at best, complementary) to providing the CLRA plaintiff with a complete remedy. The first premise underlying the majority's conclusion is, therefore, unsound. The majority's second premise fares no better. The majority asserts that private arbitration is inferior to the judicial forum in administering a public injunctive remedy and will diminish or frustrate the public benefit of a CLRA injunction. (Maj. opn, ante, 90 Cal.Rptr.2d at p. 346, 988 P.2d at p. 78.) Specifically, the majority asserts that private arbitration has certain institutional shortcomings that are especially problematic when dealing with public injunctions. ( Id. at p. 345, 988 P.2d at p. 77.) I need not question the majority's list of purported institutional shortcomings to reject its conclusion. Initially, as I have already explained, the Legislature designed the CLRA, including its injunctive remedy, primarily to benefit the individual consumer, not to protect the public. Thus, the purported institutional shortcomings of arbitration are no more relevant here than in any other context. In addition, despite its protestations to the contrary (maj. opn, ante, 90 Cal. Rptr.2d at pp. 346-347, 988 P.2d at pp. 78-79), the majority's reliance on the purported institutional shortcomings of arbitration merely resurrects the judicial hostility toward arbitration that we long ago abandoned and that our arbitration statutes were designed to overcome. As the United States Supreme Court stated in rejecting similar arguments, the majority's qualms about arbitration do not rest on any evidence, either `in the record ... [or] in the facts of which [we may] take judicial notice,' but instead simply reflect a general suspicion of the desirability of arbitration and the competence of arbitration tribunals. ( Shearson, supra, 482 U.S. at p. 231, 107 S.Ct. 2332.) The majority's mistrust of arbitration is `far out of step with our current strong endorsement of ... statutes favoring this method of resolving disputes.' [Citation.] ( Gilmer, supra, 500 U.S. at p. 30, 111 S.Ct. 1647; see also Shearson, supra, 482 U.S. at p. 233, 107 S.Ct. 2332 [mistrust of arbitration is difficult to square with [the prevailing] assessment of arbitration].) I thought we [were] well past the time when judicial suspicion of the desirability of arbitration and of the competence of arbitral tribunals inhibited the development of arbitration as an alternative means of dispute resolution. ( Mitsubishi supra, 473 U.S. at pp. 626-627, 105 S.Ct. 3346.) We should not now turn the judicial clock backwards to an era of hostility toward arbitration. ( Madden v. Kaiser Foundation Hospitals (1976) 17 Cal.3d 699, 714, 131 Cal.Rptr. 882, 552 P.2d 1178.) More importantly, given the statutory duty the Legislature imposed on us to enforce arbitration agreements according to their terms (Code Civ. Proc, §§ 1281, 1281.2), it is not our judicial prerogative to decide that arbitration is not a suitable forum (maj. opn, ante, 90 Cal.Rptr.2d at p. 344, 988 P.2d at p. 76) or that judges, rather than arbitrators, are the most appropriate overseers of injunctive remedies explicitly designed for public protection. ( Id. at p. 346, 988 P.2d at p. 78.) As Justice Mosk recently wrote for a unanimous court, the desirability of arbitration implicates an issue of public policy  an issue that the Legislature has already resolved through Code of Civil Procedure section 1281.2. ( Mercury Ins. Group v. Superior Court (1998) 19 Cal.4th 332, 351, 79 Cal.Rptr.2d 308, 965 P.2d 1178.) If [the majority] believes that the law should allow an additional [exception] for [public injunctions], it should relay its concerns to the body that can [properly provide] satisfaction  which is the Legislature.... ( Ibid. ) [4] In short, neither of the premises central to the majority's analysis is valid. Thus, they are insufficient to support the majority's inference that because an inherent conflict exists between arbitration and the purpose of a CLRA injunction, the Legislature must have intended to exclude CLRA claims from the express statutory rule requiring full enforcement of arbitration agreements. Moreover, other CLRA provisions suggest that arbitration of CLRA injunction requests does not conflict with, and indeed advances, the CLRA's goals. I have already discussed section 1752, which declares that the CLRA's provisions and remedies are not exclusive, are in addition to any other procedures or remedies for any violation or conduct provided for in any other law, and do not limit any other statutory or any common law rights of the Attorney General or any other person to bring class actions. Thus, enforcement of a damaged consumer's agreement to arbitrate a CLRA injunction request will not preclude others, including the Attorney General, from bringing actions seeking class-wide and equitable relief. ( Gilmer, supra, 500 U.S. at p. 32, 111 S.Ct. 1647.) In Gilmer, the United States Supreme Court cited similar considerations in rejecting the claim that an inherent conflict exists between arbitration and enforcement of the important public policies furthered by the Age Discrimination in Employment Act of 1967. ( Gilmer, supra, 500 U.S. at p. 32, 111 S.Ct. 1647.) In addition, as the majority correctly explains, sections 1782 and 1784 of the CLRA promote informal methods of dispute resolution by establishing a notice and opportunity to cure mechanism that conditions a damaged consumer's ability to file an action for and recover damages. (Maj. opn., ante, 90 Cal.Rptr.2d at p. 348, 988 P.2d at p. 80.) To quote the high court, that a statute directs resort to `informal methods of conciliation, conference, and persuasion' [citation] ... suggests that out-of-court dispute resolution, such as arbitration, is consistent with the statutory scheme at issue. ( Gilmer, supra, 500 U.S. at p. 29, 111 S.Ct. 1647.) Thus, the CLRA's informal cure mechanism suggests that arbitration is consistent with the CLRA's statutory scheme. The majority draws this same inference from sections 1782 and 1784, but, citing section 1782, subdivision (d), refuses to apply it to an injunction request. (Maj. opn., ante, 90 Cal.Rptr.2d at p. 348, 988 P.2d at p. 80.) Section 1782, subdivision (d), permits a damaged consumer to file an action for injunctive relief without first invoking the CLRA's informal cure mechanism. According to the majority, the separate treatment this section affords an injunction request is consistent with the conclusion that such a request is not arbitrable. (Maj. opn., ante, 90 Cal.Rptr.2d at p. 348, 988 P.2d at p. 80.) I find that section 1782, subdivision (d), is more consistent with the opposite conclusion. Its exclusion of injunction requests from the CLRA's cure mechanism suggests, in my view, a legislative desire for speedy determination of such requests and a speedy end to the unlawful practices being committed. Supporting this inference is section 1760, which declares that one of the CLRA's purposes is to provide efficient and economical procedures to secure [consumer] protection. As I have already explained, our public policy encourages arbitration precisely because it avoids the delays of the judicial forum and offers a relatively speedy and economical method for resolving disputes. ( Moncharsh, supra, 3 Cal.4th at p. 9, 10 Cal.Rptr.2d 183, 832 P.2d 899.) Arbitration of a CLRA injunction request would therefore serve a legislative desire for speed and efficiency. By contrast, the majority's insistence on judicial determination of CLRA injunction requests despite the parties' agreement to arbitrate hinders those goals, potentially perpetuates unlawful practices, and therefore disserves the very public interest the majority seeks to further. Thus, I find section 1782, subdivision (d), to be more supportive of the conclusion that arbitration of a CLRA injunction request is consistent with the statutory scheme, than of the majority's contrary conclusion. Finally, I also disagree with the majority's assertion that section 1780, subdivision (c), suggests the Legislature intended to prohibit arbitration of CLRA injunction requests. (Maj. opn., ante, 90 Cal.Rptr.2d at p. 346, 988 P.2d at p. 78.) Section 1780, subdivision (c), provides in relevant part: If within the [specified] county there is a municipal court, having jurisdiction of the subject matter, ... then that court is the proper court for the trial of the action. Otherwise, any court in the county having jurisdiction of the subject matter is the proper court for the trial thereof. This section is simply a standard venue provision; it specifies which court among those having subject matter jurisdiction is the proper one for trial. In my view, this venue provision, which is similar to the venue provisions of many other statutory schemes, does not indicate a legislative intent to preclude arbitration. In summary, nothing in the language, structure, or legislative history of the CLRA establishes, or even suggests, that an inherent conflict exists between the Act's goals and arbitration of a CLRA injunction request. On the contrary, those sources all suggest that arbitration of a CLRA injunction request is consistent with the Act's goals. Thus, the statutory command to enforce arbitration agreements according to their terms fully applies to an agreement to arbitrate a CLRA claim, including a request for an injunction. I therefore cannot join the majority's holding that an agreement to arbitrate a CLRA injunction request is unenforceable. I would hold that an agreement to arbitrate a CLRA claim is enforceable in its entirety. BROWN, J., concurs. Dissenting Opinion by KENNARD, J. In this case, defendant Cigna Health-plans of California sought arbitration of plaintiffs' claims against it, including a statutory claim under the Consumers Legal Remedies Act (CLRA; Civ.Code, § 1750 et seq.). Defendant, however, failed to produce any competent evidence to meet its burden of establishing the existence of an agreement to arbitrate plaintiffs' claims. Accordingly, the trial court should have denied defendant's petition for arbitration. Because defendant failed to prove the existence of an arbitration agreement, it is impossible to know the scope of the alleged arbitration agreement and whether it was intended to include plaintiffs' CLRA claim. The majority nonetheless decides the arbitrability of CLRA claims, concluding that such claims are arbitrable to the extent they seek damages but not to the extent they seek injunctive relief. I do not join the majority's advisory opinion on the question. Instead, I would await a case in which the question is clearly presented on the record. The majority also appears to suggest that parties to an arbitration agreement may not use a choice of law provision to restrict the scope of arbitrable claims. I disagree. Rather than let the majority's suggestion go unquestioned and potentially mislead courts in the future, I explain the basis of my disagreement below.