“The Supreme Court should seize this opportunity to remind California courts that they may not use a rigged version of a general contract defense as a tool for striking down arbitration clauses.”
—Cory L. Andrews, WLF General Counsel & Vice President of Litigation
Click here for WLF’s brief.
(Washington, DC)—On Monday, October 28, 2024, Washington Legal Foundation (WLF) filed an amicus curiae brief urging the U.S. Supreme Court to review, and ultimately to reverse, a California appeals court decision that misconstrues the Federal Arbitration Act’s saving clause.
In McGill v. Citibank, the California Supreme Court held that an arbitration clause may not extinguish a party’s right to seek injunctive relief for the public at large. The California Court of Appeal recently held that this “McGill rule” is not preempted by the FAA. Under the FAA’s saving clause, an arbitration agreement that is otherwise enforceable remains subject to any generally applicable state-law contract defense. The McGill rule, the panel concluded, is such a defense.
But the McGill rule stands on California Civil Code § 3513, a state “maxim of jurisprudence.” WLF contends in its brief that California’s maxims of jurisprudence are not contract defenses that properly trigger the FAA’s saving clause.
Even if it stood on a real contract defense, WLF’s brief explains, the McGill rule would still be preempted. The California courts use § 3513 only as a cudgel for striking down arbitration agreements. The FAA preempts a state rule whose only purpose is to serve as a tool for striking down arbitration clauses.