Opinion
No. C 01-2388 SI
January 13, 2003
ORDER COMPELLING PLAINTIFF TO SUBMIT TO COMPULSORY ARBITRATION AND DISMISSING PLAINTIFFS' ACTION
On September 26, 2002 this Court issued an order to show cause why Title VII claims should not be ordered to arbitration, in light of the Ninth Circuit's recent decision in Equal Employment Opportunity Commission v. Luce, Forward, Hamilton Scripps, 2002 WL 2004340 (September 3, 2002). Having carefully considered the papers submitted by the parties, the Court finds that following Luce, Forward the arbitration clause in Sharon Banks' employment contract is now enforceable with respect to plaintiffs' Title VII claim. Therefore, plaintiffs are ordered to submit to compulsory arbitration. As this Court has already held that plaintiffs' other claims must be submitted to compulsory arbitration, the Court necessarily dismisses plaintiffs' complaint.
On April 8, 2002 this Court issued an Order compelling arbitration of plaintiffs' other claims, but declining to compel arbitration of plaintiffs' Title VI claims. This Court's prior Order was based on the Ninth Circuit's holding in Duffield v. Robertson Stephens Co., 144 F.3d 1182 (9th Cir. 1995), a decision which held that litigants in Title VII cases could not be required to submit to compulsory arbitration. In view of new Ninth Circuit authority, Luce Forward, this Court requested that the parties brief the issue of the enforceability of the arbitration clause in Ms. Banks' employment contract with respect to plaintiffs' remaining Title VII claims.
In Luce, Forward the Court held, "Instead of trying to salvageDuffield by creatively reconcile these inconsistencies as `different' yet `compatible holdings,' we reach the inevitable conclusion that Duffield no longer remains good law. In Duffield's stead, we now hold that an employer may require employees to arbitrate Title VII claims as a condition of employment." Luce, Forward at 1003-1004. This Court's earlier Order declining to compel arbitration noted that followingCircuit City Stores, Inc. v. Saint Clair Adams, 532 U.S. 105 (2001), there was a split among federal district courts in California about the continued viability of Duffield, but that the appellate courts in the Ninth Circuit had yet to reach this issue. Now, the Ninth Circuit has spoken. Duffield, on which this Court relied in its earlier Order declining to compel arbitration of the plaintiffs' Tite VII claims, was overruled by Luce, Forward.
Plaintiff quotes Judge Pregerson's dissent in Luce, Forward, which notes that:
it is error for one panel of our court to `remed[y]' the decision of another panel of our court, unless `a decision of the Supreme Court requires the panel' to do so . . . Indeed, we observed in Gay [ 967 F.2d 322 (9th Cir. 1992)] that `one three-judge panel of this Court cannot reconsider or overrule the decision of a prior panel,' except "`an intervening Supreme Court decision undermines an existing precedent of the Ninth Circuit and both cases are closely on point.'"
Plaintiff's Memorandum at 7:7-13 quoting Luce, Forward dissent at 1014.
Here, Circuit City was the intervening United States Supreme Court decision between this circuit's holdings in Duffield and Luce, Forward. The opinion of the court in Luce, Forward made clear that it was interpreting the Supreme Court's decision in Circuit City to require it to change course. "Our decision is consistent with the Supreme Court's language and reasoning in Circuit City. It also unifies Ninth Circuit case law and brings us in line with our sister Circuits and the Supreme Courts of California and Nevada." Luce, Forward at 1004.
The Court accordingly holds, following Luce, Forward, that compulsory arbitration agreements to arbitrate Title VII claims which comport with common law contract principles are enforceable and consequently, that Ms. Banks' remaining claims are subject to compulsory arbitration.
The Court notes that "arbitration contracts, like other contracts, must meet the requirements of generally applicable state law." Al-Safin v. Circuit City Stores, Inc. 2002 U.S.App.Lexis 19153 (9th Cir., September 9, 2002) (holding that after Luce, Forward agreements to arbitrate Title VII claims are now enforceable). See also, Gilmer v. Interstate/ Johnson Lane Corp., 500 U.S. 20 (1991) ("Thus arbitration agreements are enforceable [in the context of agreements to arbitrate Age Discrimination in Employment Act claims] `save upon such grounds as exist in law or in equity for the revocation of the contract,' 9 U.S.C. § 2. `Of course, courts should remain attuned to well-supported claims that the agreement to arbitrate resulted from the sort of fraud or overwhelming economic power that would provide grounds `for the revocation of any contract'" (quoting Mitsubishi Motors v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985)).