Court Opinion

ID: 9745638
Source: CourtListenerOpinion
Date Created: 2023-08-26 23:14:43.268671+00
Date Added: 2024-06-11T07:25:03.574400
License: Public Domain

MOSK, J., Concurring.
I concur in the result.
Having held that there was no enforceable arbitration agreement and therefore affirming the trial court’s denial of the petition to arbitrate, this court should not have reached the constitutional issue of preemption in order to make substantially inoperative an important state consumer protection law—Code of Civil Procedure section 1298. (See Palermo v. Stockton Theatres, Inc. (1948) 32 Cal.2d 53, 65 [195 P.2d 1] [“ ‘[a] court will not *588decide a constitutional question unless such construction is absolutely necessary’ ”]; Kollander Construction, Inc. v. Superior Court (2002) 98 Cal.App.4th 304, 314 [119 Cal.Rptr.2d 614] [“[w]e are constrained to avoid constitutional questions where other grounds are available and dispositive”].)
Moreover, the parties before the trial court did not argue, and the trial court did not rely upon, the preemption doctrine. The parties did not even raise the issue before this court. They only discussed the point after this court advanced the preemption issue. Under those circumstances," the preemption argument should have been deemed waived (i.e., forfeited). (See Nemarnik v. Los Angeles Kings Hockey Club (2002) 103 Cal.App.4th 631, 638, fn. 3 [127 Cal.Rptr.2d 10] [“[a] party’s failure to raise an issue below and in its opening brief constitutes a waiver”]; Brown v. Boren (1999) 74 Cal.App.4th 1303, 1316 [88 Cal.Rptr.2d 758]; Mattco Forge, Inc. v. Arthur Young & Co. (1997) 52 Cal.App.4th 820, 847 [60 Cal.Rptr.2d 780] [failure to raise issue at trial waives that issue]; Tiernan v. Trustees of Cal. State University & Colleges (1982) 33 Cal.3d 211, 216, fn. 4 [188 Cal.Rptr. 115, 655 P.2d 317] [failure to raise issue on appeal constitutes waiver]; Locke v. Warner Bros., Inc. (1997) 57 Cal.App.4th 354, 368 [66 Cal.Rptr.2d 921] [failure to raise issue in opening brief waives issue on appeal].)
That the issue is one of preemption does not preclude the waiver doctrine in this case. A party may waive the application of preemption when the issue concerns whether the choice of federal or state law applies rather than the issue of subject matter jurisdiction. (Hughes v. Blue Cross of Northern California (1989) 215 Cal.App.3d 832, 851 [263 Cal.Rptr. 850] (Hughes); Gilchrist v. Jim Slemons Imports, Inc. (9th Cir. 1986) 803 F.2d 1488, 1497 (Gilchrist).) Here, the issue involves a determination as to which law applies—the Federal Arbitration Act (9 U.S.C. § 1 et seq.) (FAA) or state law provisions applicable to arbitrations. Because the parties failed to present or argue this choice-of-law question before the trial court, the preemption issue was waived. (Hughes, supra, 215 Cal.App.3d at p. 851; Gilchrist, supra, 803 F.2d at p. 1497.)
I agree with the majority that we need not reach the issue of whether in this case the arbitration agreement complies with California law governing arbitrations because the parties here did not enter into a contract to arbitrate. That is all the more reason why this court should not have opined on preemption.
In determining that the FAA rather than California law governed, this court did not consider the choice-of-law provision in the agreement in issue that *589designated California law as controlling. This provision may have an impact on whether or not federal law preempts state law. The California Supreme Court has granted review in Cronus Investments, Inc. v. Concierge Services, LLC, review granted July 16, 2003, S116288, in a case involving the impact of a California choice-of-law clause on the application of the FAA. Whether a choice-of-law provision constitutes on agreement to apply California law to determine the enforceability of an arbitration provision may depend on the scope and terms of the arbitration agreement itself. (See Warren-Guthrie v. Health Net (2000) 84 Cal.App.4th 804, 815-816 [101 Cal.Rptr.2d 260] [contract stating “[a]ll Arbitration shall be conducted in accordance with the California Code of Civil Procedure, commencing with Section 1280” did not constitute agreement that enforceability of arbitration agreement would be determined by California law absent “express language indicating that California law shall . . . apply for all purposes”]; Mount Diablo Medical Center v. Health Net of California, Inc. (2002) 101 Cal.App.4th 711, 724 [124 Cal.Rptr.2d 607] [choice-of-law analysis is a two-step inquiry; first, whether choice-of-law clause is broad enough to include state law on the subject of arbitrability; second, whether particular provision of state law in question is contrary to purposes of the FAA]; see also Volt Information Sciences, Inc. v. Board of Trustees (1989) 489 U.S. 468, 470 [103 L.Ed.2d 488, 109 S.Ct. 1248]; Mastrobuono v. Shearson Lehman Hutton, Inc. (1995) 514 U.S. 52, 55-56 [131 L.Ed.2d 76, 115 S.Ct. 1212].)
Another reason to have avoided the preemption issue is that the parties did not establish a factual record sufficient to find preemption. (Compare Basura v. U.S. Home Corp. (2002) 98 Cal.App.4th 1205, 1214 [120 Cal.Rptr.2d 328] [evidence of interstate commerce included declarations regarding builder’s contracts with out-of-state subcontractors, communications by interstate mail and national advertising] with Steele v. Collagen Corp. (1997) 54 Cal.App.4th 1474, 1490 [63 Cal.Rptr.2d 879] [facts insufficient to establish preemption when party made no attempt to establish that its actions fell within ambit of federal statute].) The majority rely on the document in which the buyer checks off a box labeled “FHA” with regard to the financing. But there is no evidence concerning the actual financing and whether there was a loan insured by the Federal Housing Administration. The majority also rely on the form used. The form itself, which is approved by the California Association of Realtors and contains that organization’s logo, states that the “form is available for use by the entire real estate industry.” The sole reference in the form to a national organization is the statement that only a member of the National Association of Realtors may use the registered mark REALTOR (R). Based on this factual record, I find it difficult to see a sufficient connection between the transaction and interstate commerce so as to result in the FAA preempting state arbitration law in this case.
*590The evisceration of state law requires that the issue be necessary to the decision and be based on a more developed record. I concur in the result affirming the trial court’s order denying the petition to arbitrate.