Court Opinion

ID: 3178627
Source: CourtListenerOpinion
Date Created: 2016-02-18 21:06:59.010548+00
Date Added: 2024-06-11T07:38:54.974792
License: Public Domain

NOT FOR PUBLICATION

                       UNITED STATES COURT OF APPEALS
                                                                                      FILED
                                FOR THE NINTH CIRCUIT
                                                                                       FEB 18 2016
                                                                                  MOLLY C. DWYER, CLERK
                                                                                    U.S. COURT OF APPEALS
 JOSE SIERRA, an individual , on behalf                 No. 13-55891
 of himself, and on behalf of all persons
 similarly situated,                                    D.C. No. 8:13-cv-00319-AG-JPR

                Plaintiff - Appellant,                  MEMORANDUM*

   v.

 OAKLEY SALES CORPORATION,

                Defendant - Appellee.

                      Appeal from the United States District Court
                         for the Central District of California
                      Andrew J. Guilford, District Judge, Presiding

                            Argued and Submitted June 3, 2015
                                  Pasadena, California

Before: M. SMITH and N.R. SMITH, Circuit Judges and LEFKOW,** Senior
District Judge.

        Jose Sierra appeals the district court’s Order dismissing his California

Private Attorney General Act (PAGA) claim and granting a Motion to Compel

         *
              This disposition is not appropriate for publication and is not precedent except as
provided by 9th Cir. R. 36-3.
        **
              The Honorable Joan Lefkow, Senior District Judge for the U.S. District Court for
the Northern District of Illinois, sitting by designation.
Arbitration. We have jurisdiction pursuant to 28 U.S.C. § 1291. We reverse and

remand to the district court for further proceedings.

      The central issue in this appeal turns on whether the Federal Arbitration Act

(FAA) preempts the California rule that “an employee’s right to bring a PAGA

action is unwaivable.” Iskanian v. CLS Transp. L.A., LLC, 327 P.3d 129, 148 (Cal.

2014). Our recent decision in Sakkab v. Luxottica Retail North America, Inc. held

that “the FAA does not preempt the Iskanian rule.” 803 F.3d 425, 429 (9th Cir.

2015). Therefore, the Iskanian rule applies to the arbitration agreement between

Sierra and Oakley Sales Corporation and Sierra’s waiver of his right to bring a

representative PAGA action is unenforceable.

      Oakley’s contention that the FAA requires enforcement of Sierra’s waiver in

the arbitration agreement is foreclosed in light of our decision in Sakkab.

Although courts must generally enforce arbitration agreements according to their

terms, Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 U.S.
468, 478 (1989), the FAA permits arbitration agreements to be declared

unenforceable “upon such grounds as exist at law or in equity for the revocation of

any contract,” 9 U.S.C. § 2. “[T]he Iskanian rule is a ‘generally applicable’

contract defense that may be preserved by § 2’s saving clause, provided it does not

conflict with the FAA’s purposes.” Sakkab, 803 F.3d at 433. The Iskanian rule

“does not conflict” with the objectives of the FAA and is not preempted. Id.
       An arbitration agreement is not per se unconscionable, and, in this

arbitration agreement, the offending clause waiving representative claims appears

to be severable from the rest of the agreement. The agreement provides:

              If any provision . . . of the Dispute Resolution Agreement
              is held illegal, invalid or unenforceable in any respect,
              Oakley and the Employee agree that such provision . . .
              shall be deemed to be modified only as necessary to permit
              its enforcement to the maximum extent permitted by
              applicable law (except that Oakley does not agree under
              any circumstances to a modification of the Dispute
              Resolution Agreement to permit a class or collective action
              to be adjudicated in the arbitration forum in any case
              brought as a class or collective action.) In this event, the
              remainder of the Dispute Resolution Agreement shall not
              be affected thereby.

Accordingly, we reverse the district court’s order dismissing Sierra’s First

Amended Complaint and remand to the district court to decide where Sierra’s

representative PAGA claims should be resolved.1 See id. at 440 (remanding to the

district court to determine whether representative PAGA claims should be

arbitrated or litigated).

       REVERSED and REMANDED.

       1
        We note that the arbitration agreement states that “Oakley expressly does not
agree to arbitrate any claim on a class or collective basis.” Nonetheless, it is not
forbidden from doing so.