On April 6, 2017, the Supreme Court of California issued an opinion in McGill v. Citibank, N.A., No. S224086, 2017 Cal. LEXIS 2551 (Apr. 6, 2017) that opens up new possibilities for consumers to hold defendants that are engaged in wrongful business practices accountable even where an arbitration clause is at issue.
After opening an account with Citibank, the plaintiff’s account agreement was amended to include arbitration provisions. The plaintiff sued Citibank in part to enjoin its allegedly deceptive business practices (“public injunctive relief”). Citibank argued that the plaintiff could not sue for injunctive relief because the U.S. Supreme Court’s decisions in Concepcion and Italian Colors held that such claims are preempted under the Federal Arbitration Act (“FAA”). However, the California Supreme Court found that the arbitration agreement in McGill was invalid and unenforceable under California law because the agreement limited the plaintiff’s right to obtain public injunctive relief under the Unfair Competition Law (“UCL”), Consumers Legal Remedies Act (“CLRA”), and False Advertising Law (“FAL”) in any forum, not just within the arbitration context. It cited Civil Code section 3513, which provides in part that “a law established for a public reason cannot be contravened by a private agreement.” McGill, 2017 Cal. LEXIS 2551, at *23, 25, 30 (quoting Civ. Code § 3513). Significantly, the California Supreme Court held that “the FAA does not require enforcement of a provision in a predispute arbitration agreement that, in violation of generally applicable California contract law, waives the right to seek in any forum public injunctive relief under the UCL, the CLRA, or the false advertising law.” McGill, 2017 Cal. LEXIS 2551, at *28 (emphasis in the original).
The end result of McGill v. Citibank is that arbitration clauses may not be enforceable if they expressly or effectively prevent statutory claims for “public injunctive relief” (i.e., relief that by and large benefits the general public) in court and arbitration. Post-McGill, there is now a chance for consumers in California to bring public injunctive relief claims against businesses even where an account or customer service agreement includes an arbitration clause, depending on the terms of the arbitration clause. However, this case and the questions addressed by the California Supreme Court could find their way to the U.S. Supreme Court soon, prompting further analysis under Concepcion and Italian Colors.
If you are a consumer who has been the subject of potential unlawful, deceptive or fraudulent business practices, please contact our office.
The attorneys at Kershaw, Cook & Talley successfully represent consumers in lawsuits against manufacturers and companies involving defective products and product recalls. Our experienced trial attorneys recover thousands of dollars on behalf of injured individuals in cases involving defective medical devices, dangerous drugs, car defects and more.
At times, attorneys require further expertise and resources, legally and financially, to resolve a legal matter. We have the team, capability and dedication to handle challenging cases. If you have a case exceeding your resources with respect to workforce or experience, consider contacting our firm. We welcome referrals from firms in Sacramento and throughout the United States.
We provide free case consultations. If you, or a loved one, suffered an injury due to another’s negligence or wrongful conduct, call our firm. We will examine your individual situation and explain your legal rights. Our attorneys have extensive experience representing injured individuals, in both jury trials and settlement negotiations.
Kershaw, Cook & Talley is a Sacramento law firm founded on the principle of helping our clients through personalized legal services. With this philosophy, Kershaw, Cook & Talley has garnered a statewide and national reputation for providing outstanding legal representation and obtaining significant compensation for our clients.
We understand personal injury cases are often emotionally and financially straining. Our team of top personal injury attorneys in Sacramento is committed to seeking justice for individuals injured as a result of another's negligence or intentional misconduct. At Kershaw, Cook & Talley, our experienced personal injury attorneys will hold the responsible parties accountable for their actions.