New class action arbitration decision: Parrish v. Cingular Wireless, LLC
On May 18, the Court of Appeal (First Appellate District, Division Five) declined to follow Szetela v. Discover Bank, 97 Cal.App.4th 1094 (2002), and enforced a "no-class-action" arbitration clause in a consumer contract. It determined that the specific clause in question was "not unduly one-sided, harsh, or in violation of public policy." Parrish v. Cingular Wireless, LLC, ___ Cal.App.4th ___ (May 18, 2005). The case involved claims under the UCL and the Consumers Legal Remedies Act, and as a notable exception to its holding, the Court refused to enforce the arbitration clause as to the UCL and CLRA claims for injunctive relief (following Cruz v. PacifiCare Health Systems, Inc., 30 Cal.4th 303 (2003)), and as to the plaintiff who sought relief solely as a private attorney general under the UCL. (Slip op. at 5-7.) The Court also held: "Although we asked the parties for supplemental briefing, we find it unnecessary to examine the effect of Proposition 64 upon the present appeal." (Slip op. at 5 n.7.)

According to the docket, a rehearing petition was filed in the case on June 1, and I would imagine we will see a petition for review, if rehearing is denied. The validity of "no-class-action" arbitration clauses is the subject of conflicting appellate opinions not only in California, but in federal and state courts across the country, and is presently before the California Supreme Court in Discover Bank v. Superior Court, case no. S113725, which was orally argued on April 7. The docket in Discover Bank indicates that "new authorities" were presented to the Court by letter on May 20, two days after the Parrish opinion was issued.
- posted by Kim Kralowec @ 5:10 AM