California District Court Rejects Shotgun Attacks On Arbitration Agreements

Alright, we all know in the wake of Italian Colors, Concepcion, and now many other cases that the presumption of arbitrability isn't just a doctrine to recite in the manner of saying grace before invalidating an agreement, but is actually meant to be followed, even when it might ultimately thwart a class action. But can a would-be class action plaintiff evade an arbitration provision through scattershot attacks on the arbitration agreement's individual provisions?

That seemed to be the approach in Herrera v. CarMax Auto Superstores, Inc., Case No. CV-14-776-MWF (VBKx) (C.D. Cal., July 2, 2014), but it didn't really work. In Herrera, the three plaintiffs brought a garden-variety wage and hour suit against the employer asserting that they were not paid for all hours worked. Each of the plaintiffs signed arbitration agreements that incorporated arbitration rules and procedures set forth in a separate booklet that was periodically updated. They raised no fewer than eleven arguments why the provisions of those agreements could not be enforced.

The District Court, in an opinion notable for its conciseness, rejected each of those arguments including finding that:

The defendant could enforce the agreements, even though technically they were entered into by a corporate predecessor. The defendant's right to change the rules on 30 days' notice under a set procedure did not render the agreements illusory. While the arbitration agreements were contracts of adhesion, they were only slightly procedurally unconscionable, and not enough to invalidate them solely on that basis. It was not unconscionable for the agreements to use the same statute of limitations as state law. The arbitration...