The UCL Practitioner

Recent Ninth Circuit CAFA opinions: Allen v. The Boeing Co., Eminence v. Bank of New York Mellon, Jordan v. Nationstar, and Reyes v. Dollar Tree Stores

The Ninth Circuit has construed CAFA in four new opinions this month, including one handed down yesterday:

• Allen v. The Boeing Co., ___ F.3d ___ (9th Cir. Apr. 27, 2015) (construing CAFA's "local single event" exception for mass actions)

• Eminence Investors, L.L.L.P. v. Bank of New York Mellon, ___ F.3d ___ (9th Cir. Apr. 2, 2015) (construing CAFA's securities exception)

• Jordan v. Nationstar Mortgage LLC, 781 F.3d 1178 (9th Cir. Apr. 1, 2015) (addressing timeliness of removal under CAFA and types of post-filing events "from which it may first be ascertained that the case is ... removable")

• Reyes v. Dollar Tree Stores., Inc., 781 F.3d 1185 (9th Cir. Apr. 1, 2015) (holding that superior court's order granting class certification of expanded class definition created new removal opportunity under CAFA)

A timely UCL reminder: East West Bank v. Rio School District

In East West Bank v. Rio School District, ___ Cal.App.4th ___ (Apr. 1, 2015), the Court of Appeal (Second Appellate District, Division Six) reminded us that the doctrine of unclean hands does not apply to UCL claims, equitable though they may be: 

Not only is there no analogous case applying the [unclean hands] doctrine to an action pursuant to [Public Contract Code] section 7107, there are analogous cases holding as a matter of law that the doctrine does not apply to such statutory causes of action.

In Mendoza v. Ruesga, supra, 169 Cal.App.4th 270, a group of immigrants sued an immigration consultant alleging violations of the Immigration Consultants Act (ICA).  (Bus. & Prof. Code, § 22440 et seq.)  The defendant raised unclean hands as a defense based on the immigrants' undocumented status.  The court held the doctrine of unclean hands inapplicable as a matter of law stating:  "Plaintiffs contend that as a matter of law the unclean hands doctrine is inapplicable to their cause of action under the ICA because it is based on Ruesga's violation of statutes intended to protect consumers.  [Fn. omitted.]  We agree with plaintiffs.  'It is true that when the Legislature enacts a statute forbidding certain conduct for the purpose of protecting one class of persons from the activities of another, a member of the protected class may maintain an action notwithstanding . . . that he has shared in the illegal transaction.  The protective purpose of the legislation is realized by allowing the plaintiff to maintain his action against a defendant within the class primarily to be deterred.'  [Citation.]"  (Id., at p. 279; see also Ticconi v. Blue Shield of California Life & Health Ins. Co. (2008) 160 Cal.App.4th 528, 543 [holding defense of unclean hands does not apply to an action under the unfair competition law (Bus. & Prof. Code, § 17200 et seq.)].)

Id. at 20-21 (emphasis and hyperlink added).  My original post on Ticconi (before rehearing) is here.

U.S. Supreme Court takes up another California arbitration case: DIRECTV, Inc. v. Imburgia

Many thanks to the blog reader who advised me that in March, the U.S. Supreme Court granted cert. in DIRECTV, Inc. v. Imburgia, Case No. 14-462.  The case was relisted twice before cert. was granted. 

In Imburgia, the Court of Appeal (Second Appellate District, Division One) held that the class action waiver provision of the arbitration clause "was unenforceable under California law, so the entire arbitration agreement is unenforceable.  The superior court therefore properly denied the motion to compel arbitration."  Imburgia v. DIRECTV, Inc., 225 Cal.App.4th 338, 347 (2014), cert. granted.  My original post on the opinion is here.

The California Supreme Court declined to take up this case in July 2014, over the dissent of Justice Baxter, who voted to grant review.  The cert. petition was filed in October 2014, with the following statement of the question presented:

Whether the California Court of Appeal erred by holding, in direct conflict with the Ninth Circuit, that a reference to state law in an arbitration agreement governed by the Federal Arbitration Act requires the application of state law preempted by the Federal Arbitration Act.

The Ninth Circuit opinion referred to is Murphy v. DIRECTV, Inc., 724 F.3d 1218 (9th Cir. 2013).

Here is the SCOTUSblog case page, where you can find links to the petition and other documents. 

Consumer arbitration case set for oral argument in May: Sanchez v. Valencia Holding Co.

The California Supreme Court has announced that on May 5, 2015 at 9:00 a.m., it will hear oral argument in Sanchez v. Valencia Holding Co., Case No. S199119.  This is the issue on review, according to the docket:

Does the Federal Arbitration Act (9 U.S.C. § 2), as interpreted in AT&T Mobility LLC v. Concepcion (2011) 563 U. S. __, 131 S.Ct. 1740, preempt state law rules invalidating mandatory arbitration provisions in a consumer contract as procedurally and substantively unconscionable?

The Court of Appeal (Second Appellate District, Division One) said no, and declined to enforce a no-class-action arbitration clause in a consumer contract, notwithstanding Concepcion.  Sanchez v. Valencia Holding Co., LLC, 201 Cal.App.4th 74 (2011), review granted.  My original post on the opinion is here.  The court reasoned that ordinary state-law unconscionability principles were preserved by Concepcion.

Unfortunately, I have a scheduling conflict on the date of the argument and will not be able to attend.  If you are planning to attend and would like to write a report for posting here, please let me know ([email protected]).  The argument will take place in San Francisco. 

Supreme Court takes up UCL/CLRA arbitration issue: McGill v. Citibank

Last week, on April 1, 2015, the Supreme Court granted review in McGill v. Citibank, No. S224086. 

In McGill, the Court of Appeal (Fourth Appellate District, Division Three) held that the Federal Arbitration Act, as construed in Concepcion, preempted the Broughton-Cruz rule.  See McGill v. Citibank, N.A., 232 Cal.App.4th 753 (2014), review granted.  

The California Supreme Court established this rule in a pair of cases: Broughton v. Cigna Healthplans of California, 21 Cal.4th 1066 (1999), which held that "the injunctive relief portion of a CLRA claim is inarbitrable," and Cruz v. PacifiCare Health Systems, Inc., 30 Cal.4th 303 (2003), which extended this holding to the UCL and FAL. 

My post on the Court of Appeal's original opinion in McGill is here.  If and when I obtain copies of the petition for review and other briefs, I will post them here.