Court of Appeal (Cal.) Finds Arb. Clause on Sanchez Remand Not Unconscionable; Says Trial Court Properly Struck Class Allegations in Granting Petition to Arbitrate

In Vargas v. SAI Monrovia B, Inc., 2015 WL 7301781, at *5 (Cal.App. 2 Dist., 2015) (unpublished), the Court of Appeal found the RISC arb. clause not to be unconscionable.  What’s interesting about the opinion is what to do with the class action allegations in granting the petition to arbitration.  The Court of Appeal found that the trial court properly struck the class allegations.

This court’s prior opinion did not address the enforceability of the class action waiver, which is critical to both the enforceability of the arbitration provision and the validity of the trial court’s ruling striking the class action allegations. We must now do so.  In Sanchez, supra, 61 Cal.4th at pages 923–924, the Supreme Court addressed the same “poison pill provision” contained in the identical contract in this case. It concluded the class action waiver was not unconscionable, in light of AT & T Mobility LLC v. Concepcion (2011) 563 U.S. 333 [131 S.Ct. 1740]. It further concluded “that the CLRA’s antiwaiver provision is preempted insofar as it bars class waivers in arbitration agreements covered by the FAA,” as is the agreement in issue in both Sanchez and the present case. Accordingly, we necessarily conclude that the class action waiver in the contract is enforceable, the “poison pill” provision thus does not come into play, and the arbitration provision in the contract is enforceable. Moreover, because plaintiffs waived their rights to pursue a class action, the trial court properly struck the class allegations from the complaint.