In Dictum, Court Suggests Armendariz Is No Longer Good Law
Mercado v. Doctors Medical Center of Modesto, Inc., Case No. F064478 (5th Dist. July 26, 2013) (Hill, P.J., author 3:0) (unpublished) offers a routine unconscionability analsysis of an employee agreement to arbitrate. Finding “some degree” of procedural unconscionability, based on an adhesive contract and the lack of a prominent heading or bold print, the Court moves on to analyze substantive unconscionability, concluding that the arbitration agreement meets the requirements of Armendariz v. Foundation Health Psychare Services Inc., 24 Cal.4th 83 (2000), and therefore is not substantively unconscionable.
Unremarkable though the case may be, the following dictum about Armendariz caught our attention:
“Refusing to enforce an arbitration agreement according to its terms because the claims involve unwaivable statutory rights and the agreement does not contain specific provisions the court believes are necessary to vindicate those statutory rights appears contrary to the decision in Concepcion [__ U.S. __, 131 S.Ct. 1740 (2011)]. Armendariz carved out a class of claims – those involving unwaivable statutory rights – and applied a special rule to agreements to arbitrate those claims – requiring them to meet its five minimum requirements – in order for them to be enforceable. That appears to be the type of state rule Concepcion condemned.”
Perhaps another way to read Concepcion is that state court defenses such as unconscionability still exist, and another way to read Armendariz is that it is a gloss on the meaning of unconscionability. In any case, the waiver of unwaivable statutory rights through an agreement to arbitrate is a battleground for future appellate decisions. That old maxim that “for every right there is a remedy” cannot happily coexist with the waiver of unwaivable statutory rights.
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