Our Article In The Daily Journal Examines Hohenshelt v. The Superior Court.
Our article in the April 10, 2024 Daily Journal begins: "The majority and minority opinions in a recent California appellate decision highlight the conflict between California and federal attitudes about arbitration. The case is Dana Hohenshelt v. The The Superior Court of Los Angeles County; Golden State Foods Corp. (real party in interest) (2024) 99 Cal.App.5th 1319. The majority opinion, authored by Justice Maria Stratton, claims to further the objectives of arbitration. Sharply dissenting, Justice John Shepard Wiley Jr. writes, “Judged by actions, California law over the last few decades . . . has not been a friend of arbitration.”
The narrow issue raised by the case concerns the application of Cal. Code of Civ. Proc. § 1281.98. This is the provision requiring payment within 30 days of arbitration fees and costs by drafters of arbitration agreements, or else the right to arbitrate is waived, and consumers and employers can then choose to arbitrate or litigate. The majority opinion joins the many California cases that have strictly interpreted the statute, leading to waiver of the right to arbitrate by employers and corporations that miss the due date for payment. The majority opinion claims that the prompt payment requirement furthers the purpose of arbitration, and prevents the abuse of initiating arbitration and leaving it in limbo.
Justice Wiley, dissenting, lays out the argument that this statute unfairly burdens arbitration agreements more than other contracts. As a result, he concludes that it is preempted by the Federal Arbitration Act. Because preemption relies on the Supremacy Clause, it presents an issue of constitutional significance. Justice Wiley suggests that once again the US Supreme Court will eventually send a message that California law concerning arbitration is preempted by the FAA.
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