Court of Appeal (Cal.) Finds Car Dealer Waived Arbitration of Class Claims under Standard-Form RISC

In Alvarado v. Miller-DM, Inc., 2013 WL 205927 (2013), the California Court of Appeal found, in an unpublished case, that the defendant waived its right to arbitrate the class claims under a standard form automobile RISC.  In the pre-Concepcion petition to compel arbitration, the Defendant had excluded from its petition plaintiff’s injunctive relief cause of action; declaratory relief claim; and the class claim under the act. The Court granted the petition to compel arbitration, except for the injunctive relief and class claims under the act. As to the injunctive relief and class claims, trial of those matters was stayed. The trial court found the so-called “poison pill” clause was inapplicable because “there has been no effort to arbitrate” the class allegations. Nearly one year later, and 4 months after the Concepcion decision, defendant moved for an order lifting the stay and sought to compel arbitration of plaintiff’s class claim under the act.  Defendant argued plaintiff’s class claim was subject to arbitration based on AT & T Mobility LLC v. Concepcion (2011) 563 U.S. 1, ___ [131 S.Ct. 1740, 1750–1751] (AT & T Mobility ). In opposition, plaintiff argued: the act prohibited enforcement of a class action waiver; defendant waived its right to request arbitration by waiting four months after the AT & T Mobility decision to file its third petition; and the arbitration provision was procedurally and substantively unconscionable. The Court of Appeal found waiver.

Defendant expressly waived its right to arbitrate the class action claim. Defendant’s second petition for arbitration expressly sought not to arbitrate plaintiff’s injunctive and declaratory relief causes of action under the act. Defendant intentionally, with full knowledge of the facts, relinquished, i.e., waived, the right to arbitrate plaintiff’s class claim in July 2010. ( In re S.B. (2004) 32 Cal.4th 1287, 1293, fn. 2; Wells Fargo Bank v. Superior Court (2000) 22 Cal.4th 201, 211; Waller v. Truck Ins. Exchange (1995) 11 Cal.4th 1, 31.) Defendant stated in its second petition, “Likewise as to the tenth cause of action for class treatment of the Consumer [s] Legal Remedies Act claim, [defendant] does not suggest that the [arbitration clause] applies to that claim.” In reply to plaintiff’s opposition to the second petition, defendant again stated it was not seeking to the arbitrate the class action claim under the act. At the September 28, 2010 hearing, the trial court granted defendant’s second petition, finding the “poison pill” clause was inapplicable because “there has been no effort to arbitrate the class allegations” under the act. Moreover, defendant waited almost four months after AT & T Mobility opinion was filed before filing its third arbitration-related petition. Because defendant expressly waived its right to arbitrate the class claims under the act, we need not address any implied waiver issues. Further, we do not need to discuss the parties’ preemption contentions. (AT & T Mobility LLC v. Concepcion, supra, 563 U.S. at p. ___ [ 131 S.Ct. at p. 1748].) Also, we need not discuss whether the arbitration clause is procedurally or substantively unconscionable.