The Federal Arbitration Act Preempts Any Right To A Class Action Under State Law

The California Court of Appeal recently held that the Federal Arbitration Act (FAA) preempts any statutory right to a class action under the California Consumers Legal Remedies Act (CLRA). See Caron v. Mercedes-Benz Financial Services USA LLC et al., --- Cal.Rptr.3d ----, 2012 WL 2579662 (Cal.App. 4 Dist.). In doing so, the court applied the reasoning of the Supreme Court's landmark decision in AT&T Mobility, Inc. v. Concepcion, 131 S. Ct. 1740 (2011) holding that the FAA preempts state laws refusing to enforce arbitration agreements according to their terms.

In Caron, the plaintiff purchased a vehicle under a contract that included an arbitration clause with a class action waiver. The plaintiff filed suit against the dealership and the lender, asserting class claims under the CLRA and other laws. The defendants petitioned to compel arbitration. The trial court denied the petition and refused to compel arbitration because it felt bound by Fisher v. DCH Temecula