Winston & Strawn LLP v. Constance Ramos, et al.
Arbitration Securities ClassAction
Whether California's Armendariz requirements and arbitration-specific unconscionability rules are preempted by the Federal Arbitration Act
QUESTIONS PRESENTED In AT&T Mobility LLC v. Concepcion, this Court reiterated that the Federal Arbitration Act (FAA) requires courts to “place arbitration agreements on an equal footing with other contracts.” 563 U.S. 333, 339 (2011). That means that courts may not craft “legal rules that apply only to arbitration” or that disproportionately disadvantage arbitration. Kindred Nursing Ctrs. Ltd. P’ship v. Clark, 1378. Ct. 1421, 1426 (2017) (internal quotation marks omitted). In this case, the California Court of Appeal invalidated an arbitration agreement in light of a pre-Concepcion opinion, Armendariz v. Foundation Health Psychare Services, Inc., 6 P.3d 669 (Cal. 2000), which the California Supreme Court has continued to endorse. The questions presented are: 1. Under Armendariz, an arbitration provision in an employment agreement cannot be enforced as written unless it meets five judge-made “minimum requirements” based on policy judgments about what would be necessary to vindicate state statutory rights in an arbitral forum, and also complies with unconscionability rules. Are those requirements and rules preempted by the FAA? 2. Armendariz requires courts to apply a more rigid severability rule to arbitration agreements than to all other contracts: When an arbitration provision has more than one invalid term, the whole provision is presumptively invalid. Is this arbitration-only severability rule preempted by the FAA?