McGILL v. CITIBANK (To be called and continued to the December 2016 calendar.) (Corrigan, J., not participating; Haller, J., assigned justice pro tempore.)

Respondent’s Petition for Review

Cal.January 28, 2015

3A $224086 IN THE SUPREME COURT OF THE STATE OF CALIFORNIA SHARON MCGILL,an individual, Petitioner, Vv. CITIBANK,N.A., Respondent. SUPREME COURT AFTER DECISION BY THE COURT OF APPEAL, | le E OQ FOURTH APPELLATEDISTRICT, DIVISION THREE CASE G049838 JAN 28 2015 FROM THE SUPERIOR COURT, Frank 4. Victsuire Clerk COUNTY OF RIVERSIDE, vee — CASE NO. RIC1109398, ASSIGNED FOR ALL Deputy PURPOSES TO JUDGE PRO TEM JOHN W. VINEYARD, DEPARTMENT12 PETITION FOR REVIEW OR, IN THE ALTERNATIVE, FOR A GRANT AND TRANSFER ORDER CAPSTONE LAW APC RAUL PEREZ (SBN 174687) GLENN A. DANAS (SBN 270317) MELISSA GRANT (SBN 205633 LIANA CARTER (SBN 201974) 1840 CENTURY PARK EAST, SUITE 450 LOS ANGELES, CA 90067 TELEPHONE: (310) 556-4811 FACSIMILE: (310) 943-0396 RAUL.PEREZ@CAPSTONELAWYERS.COM GLENN.DANAS@CAPSTONELAWYERS.COM MELISSA.GRANT@CAPSTONELAWYERS.COM LIANA.CARTER@QCAPSTONELAWYERS.COM Attorneys for Petitioner SHARON MCGILL No. IN THE SUPREME COURT OF THE STATE OF CALIFORNIA SHARON MCGILL, an individual, Petitioner, Vv. CITIBANK, N.A., Respondent. AFTER DECISION BY THE COURT OF APPEAL, FOURTII APPELLATE DISTRICT, DIVISION TIIREE CASE G049838 FROM THE SUPERIOR COURT, COUNTYOF RIVERSIDE, CASE No. RIC1109398, ASSIGNED FOR ALL PURPOSES TO JUDGE PRO TEM JOHN W.VINEYARD, DEPARTMENT12 PETITION FOR REVIEW OR, IN THE ALTERNATIVE, FORA GRANT AND TRANSFER ORDER CAPSTONE LAW APC RAUL PEREZ (SBN 174687) GLENN A. DANAS(SBN 270317) MELISSA GRANT (SBN 205633) LIANA CARTER(SBN 201974) 1840 CENTURY PARK EAST, SUITE 450 LOS ANGELES, CA 90067 TELEPHONE: (310) 556-4811 FACSIMILE: (310) 943-0396 RAUL.PEREZ(@CAPSTONELAWYERS.COM GLENN.DANAS@CAPSTONELAWYERS.COM MELISSA.GRANT@CAPSTONELAWYERS.COM LIANA.CARTER@CAPSTONELAWYERS.COM Attorneysfor Petitioner SHARON MCGILL TABLE OF CONTENTS TABLE OF AUTHORITIES ......ccccccccssscssssessssesessstecsssiesssesssverssssseseessssesesessesteeseseee iii ISSUES PRESENTED FOR REVIEW .0..cccscccssssscssessssessvessecssesestesessecessessessssescesese 1 INTRODUCTION 0..cccccsscssessssssesssssesssuessusesssssvessssesssssecsneessvesssesartsssasessressaseesesvesee 1 STATEMENT OF THE CASEu.cccssccsssecssssesscsssesssssesersvsssessssesssiessssessessecesesessseeseesees 5 ARGUMENT... ccccsscssessssessseessucssucseresssessucssvecesucsasesssetssessesssessversvesseseveeeveisessesssnees 7 I THE COURT OF APPEAL’S RULING THAT THIS Il. COURT'S DECISIONS IN BROUGHTONAND CRUZ HAVE BEEN ABROGATED REQUIRESREVIEW .00......ccccccccecessseseeseeeees 7 A. Consistent With United States Supreme Court Precedent, Broughton and Cruz Hold That Claims Seeking Public Injunctive Relief Under the UCL, FAL and CLRA Are Not Arbitrable Based on an Inherent Conflict with Arbitration .....0.00.0.000c0cccccccecessscesseseeveceeveneeees 7 B. ~ The Court of Appeal’s Refusal to Follow Controlling California Supreme Court Cases Has Now Created a Split In Authority........000cccc cece ccc eccsececceenseestenssees 13 1, G 2 The Court of Appeal Cannot Flout Controlling California Supreme Court Authority 200... cece cee cece cece cence eesseeeceseecsassesstesserecsseessateens 13 The Court of Appeal’s Decision Conflicts With This Court’s Recent Jurisprudence And Must Be Reviewed.............0.ccccceeeeeeeeee 14 The Court of Appeal’s Ruling Also Conflicts With Decisions From Its Sister COUMTS ooo ecce ccc ceecccceecccccccceececcecseeeceueescausceueeaescesecerccesreesereness 19 Plenary Review Would Also Resolve a Conflict Between State and Federal Authority Regarding the Viability of the Broughton-Cruz Rule ..........ccccccccceeccceec ce cesceeeeecseesesenseenscenseenes 22 THE ARBITRATION AGREEMENT HERE PROHIBITS PUBLIC INJUNCTIONS FROM BEING AWARDEDIN ANY FORUM,IN VIOLATION OF FEDERAL AND STATE SUPREME COURT PRECEDENTooo... coccieccecceccceecceeee ene eeeeeeeceeeeeeeeeeetseeecesteseecittasenteenseseeats 24 I. IN THE ALTERNATIVE, THE COURT OF APPEAL’S RULING THAT BROUGHTON AND CRUZ ARE PREEMPTED AND NO LONGER VIABLE MERITS A GRANT AND TRANSFER ORDER 000... ccc cecceecceeeeeeeneeeneeeseeeteseeenseesseenaes 27 CONCLUSION0.0 cceeccccceeccceccccesececneeeceneeesceesaeeeaeecsaeceaeeeeneaeseseenecesssesaetenseesseeeaes 28 CERTIFICATE OF WORD COUNT......oocccccceccceeesecenceeceeeeecncetetesseetsseessaeenseeenee 29 i TABLE OF AUTHORITIES STATE CASES Armendariz v. Foundation Health Psychcare Svcs., Inc. (2000) 24 Cal.4th 83.000. ccccceeeeeeeceeeeeteeeeeneeceeeeeeteteetseneees 14, 25, 26 Auto Equity Sales, Inc. v. Super. Ct. (1962) 57 Cal.2d 450.000... 14, 24 Broughton v. Cigna Healthplans ofCalifornia (1999) 21 Cal.4th 1066 ooo.cee eecccescceseeceneceeeeseeesesseeseeeesseeeeseenseenseens passim Brown v. Automobile Club ofSouthern California (July 31, 2013 No. B241995) 2013 Cal.App.Unpub. LEXIS 5410 ooo... cececceececceeenseneeneesseeseens 20 Brown vy. Ralphs Grocery Co. (2011) 197 Cal.App.4th 489 ........... 16, 17, 21 Catchpole v. Brannon(1995) 36 Cal.App.4th 237 oo... ceeccceeseeseenees 25 Clark v. First Union Securities, Inc. (2007) 153 Cal.App.4th 1595 .......... 19 Coast Plaza Doctors Hospital v. Blue Cross ofCalifornia (2000) 83 Cal.App.4th 677 oo... ccccccccccccceccceecesteceneceetsesseeeneenetenere 19 Cruz v..PacifiCare Health Systems, Inc. (2003) 30 Cal.4th 30........... passim Gutierrez v. Autowest, Inc. (2003) 114 Cal.App.4th 77.0.0... 19 Iskanian v. CLS Transportation Los Angeles LLC (2014) 59 Cal4th 348oooccccecccctenseeeeccneeeeeentseceneesestens passim Mehrv. Super. Ct. (1983) 139 Cal.App.3d 1044.00... eeeccccccceteceees 13 Nelson v. Legacy Partners Residential, Inc. (2012) 207 Cal.App.4th 1115 oo...eeee ect eeneeeeesetteeeeees 20, 21 People v. Freeman (2010) 47 Cal.4th 993 ooo. ccccccecccecc cette ttseteteeneens 25 People v. Super. Ct. (Moore) (1996) 50 Cal.App.4th 1202 «00.0000 24 People v. Williams (2013) 56 Cal.4th 630 o......ccc cece cece ceecceetestecnsees 24 Ramosv. Fry’s Electronics, Inc.(Nov. 17, 2014, No. B246404) 2014 Cal_App.Unpub. LEXIS 8210 0...ccecceceee cece ene ee ee tttteenaes 20 Sonic-CalabasasA, Inc. v. Moreno (2013) 57 Cal.4th 11090... passim Tri-City Healthcare District v. Scripps (March 29, 2012, No. D057878) 2012 Cal.App.Unpub. LEXIS 2445 woooccecceceeee cess eeeeseeeeeecseeeneeenseeeeessaeesssseeteestiseenes 20 Truly Nolen ofAmerica v. Super. Ct. (2012) 208 Cal.App.4th 487 ........... 27 lil FEDERAL CASES American Express Co. v. Italian Colors Restaurant (2013) 570 U.S. [133 S.Ct. 2304, 2310]eeece eeectceeceeecteeteeens passim AT&TMobility LLC v. Concepcion (2011) 563 U.S. [131 S.Ct. 1740]...cccereete cents passim Booker v. Robert HalfInternational (D.C. Cir. 2005) AV3 FB 77 ooo eccccccccccecccceeecceeeeeeecseeeneesceeseeessseeeeeesseecessssstseneeeeeseees 12 CompuCredit v. Greenwood (2012) S65 U.S. [132 S.Ct. 665, 671]occccc cece ceeeeecenseeeestseenseenseenies 11 Ferguson v. Corinthian Colleges, Inc. (9th Cir. 2013) 733 F.3d 928 ooo... ceccecececcceeeeseeeneeetsetsseeseeseees 22, 23, 24 Kilgore v. KeyBank, N.A. (9th Cir. 2012) 673 F.3d 947.0...cece 20 Kilgore v. KeyBank, N.A. (9th Cir. 2013) 718 F.3d 1052.00... 20, 21 Kristian v. Comcast Corp. (Ast Cir. 2006) 446 F.3d25... 12 * Mitsubishi Motors and Gilmerv. Interstate/Johnson Lane Corp. (1991) 500 U.S. 201eeeeee cece ceeceseenaceseeseetenseseaeenseenees Leeeetee LO Mitsubishi Motors v. Soler Chiysler-Plymouth (1985) 473 U.S. 614 oiecece cee ceebeneeeeeeeesteeeeeceseceessesseteneaees 10, 16 Perry v. Thomas (1987) 482 U.S. 483 ooo. ccccccccccccsececcsececsesestessesseens 10, 23 Preston v. Ferrer (2008) 552 U.S. 346 .o..ccccccccccccccccceeeeeetsecteeteseteesseee 12 Shearson/American Express, Inc. v. McMahon (1987) 482 U.S. 220 ooeeec cecc cece cece ces eeeseees cease eessesecsteseeseeeeeseeees 10 Southland Corp. v. Keating (1984) 465 U.S. 1 voceceeeeceee 9, 10, 23 STATE STATUTES Cal. Bus. & Prof. Code §§ 17200 ef seq. (Unfair Comp. Law (UCL)).....0.000cececece cc cececeecencsteneerneres passim Cal. Bus. & Prof. Code §§ 17500 ef seq. (False Advertising Law (FAL)) .0......000cccccccccccccseccecceseetesetnseerneee passim Cal. Civ. Code §§ 1750 e7 seq. (Cons. Legal Remedies Act (CLRA)) ......0. ccc ccccese cece cteeeetenes passim Cal. Ins. Code §§ 1758.9 ef 8€G ...occcccccccccccccccctcceeneeceteteeteseetcsecstevetenieenes 5 Cal. Lab. Code §§ 2698 e/ seg. (Priv. Atty's. Gen. Act of 2004 (PAGA))eeecece eee eee tect eteteecceetceeteesensesetseeeeteseetiteieeseets passim Cal. R. Ct. 8.S500(D))cccce cece cc cece sense eecessteensesesttitetitesttireees 4 lv Cal. R. Ct. 8.500(D)(4)...-ccccccscecccseccssecssseessessssssvesessessssessssvessareesssseveseateee 28 Cal. R. Ct. 8.528(d)oocccccesceseeseceeceseeesecceseesscenscesstessesstessscaesaees 28 FEDERAL STATUTES 9US.C. §§ 1 et seg. (Arb. Act (FAA)) oo... cccceccceesecnecnsetenees passim ISSUES PRESENTED FOR REVIEW 1. Does the Federal Arbitration Act, 9 U.S.C. §§1 et seq. (“FAA”) impliedly preempt this Court’s longstanding Broughton-Cruz rule? 2. Does the FAA require enforcementof a private arbitration agreement that completely prohibits a consumerclaimant from obtaining a statutory remedythat the California Legislature provided forthe purposeof furthering important public policies — a public injunction? INTRODUCTION In two cases decided well over a decade ago, Broughton v. Cigna Healthplans ofCalifornia (1999) 21 Cal.4th 1066 and Cruz v. PacifiCare Health Systems, Inc. (2003) 30 Cal.4th 30, this Court held that consumer claims seeking a “public injunction” under the Unfair Competition Law, Cal. Bus. & Prof. Code §§17200 et seq. (“UCL”), False Advertising Law, Cal. Bus. & Prof. Code §§17500 et seq. (“FAL”), and Consumer Legal Remedies Act, Cal. Civ. Code §§1750 et seq. (“CLRA”), cannot be compelledto arbitration. Broughton and Cruz set forth two reasons why the FAA did not preemptthis state court rule. First, the Legislature had provided for public injunctive relief underthose statutes in order to benefit the general public rather than the party bringing the action. Second, private arbitrators generally lack the institutional authority to issue and enforce public injunctions. (Broughton, supra, 21 Cal.4th at p. 1082; Cruz, supra, 30 Cal.4th at pp. 312, 316.) Although this Court has neveroverruled the Broughton-Cruz rule, the Court of Appeal below questioned the viability of these cases and refused to apply their holdings based on an overly expansive view of FAA preemption under A7&7Mobility LLC v. Concepcion (2011) 563 U.S. [131 S.Ct. 1740]. The Court of Appeal relied on misguided federal court decisionsthat conflict with Broughton and Cruz in concludingthatall of Petitioner Sharon McGill’s claims under the CLRA, UCL, and FAL, including her injunctive relief claims, must be arbitrated, even though defendant’s mandatory arbitration agreement expressly prohibited McGill from seeking the public injunctive remedy that the UCL, FAL, and CLRA provide. This contractual barof a statutory remedy that the Legislature created to further important public purposesplainly violates the Broughton- Cruz rule, and is no more preempted by the FAA nowthanit was in 1999 and 2003 when those cases were decided. The Court of Appeal rejected this Court’s prior decisions in holding that, under Concepcion, a State cannot carveoutparticular claims or remedies from mandatory arbitration. Not only has this Court held otherwise in Broughton and Cruz, but in a series ofmore recent cases such as Iskanian v. CLS Transportation Los Angeles LLC (2014) 59 Cal.4th 348 and Sonic-Calabasas A, Inc. v. Moreno (2013) 57 Cal.4th 1109, this Court held that certain claims cannot be subject to a forced waiver and confirmed that a state rule that does not interfere with “fundamental attributes” of arbitration is not preempted, invoking a new unconscionability analysis based on statutory benefits. The more nuanced analysis in these more recent cases was completely disregarded by the Court of Appeal below, which ignored that Citibank’s mandatory arbitration agreement in this case precludes Petitioner from obtaining a public injunction in any forum to remedythe alleged violations of theUCL, FAL, and CLRA,andthat the right to obtain that critically important public remedy can be preserved in this case without interfering with any of the fundamental attributes of arbitration, simply by allowing the Superior Court to determine, at the appropriate time, whether a public injunction is warranted and howitis to be enforced. If Broughton and Cruz are no longer good law, despite this Court’s careful consideration of the applicable FAA preemptionprinciples, that conclusion must be reached by this Court and not by an intermediate court. But those cases are still good law; and as long as the California Legislature continues to provide public injunctions as a core remedy forviolations of these important consumerstatutes, the courts of this state cannot allow companies doing business in California simply to opt out of the law by adopting exculpatory arbitration agreements that strip their customers of the right to pursue public injunctive relief upon an adequate threshold showing of statutory violation, irreparable harm, and important public interest. The United States Supreme Court hasitself made clear that when a private party imposes a mandatory arbitration agreementthatstrips its customers (or employees) of their right to pursue specific statutory rights and remedies,that agreementruns afoul of Section 2 of the FAA, 9 U.S.C. §2, and the principle that arbitration is “just another forum”forthe adjudication of substantive rights — not a mechanism for stripping the weakerparty of those rights. In Broughton and Cruz, this Court found an implied conflict between the mandatory arbitration agreements at issue and the public law rights provided by statute. In this case an even greater conflict exists, because Citibank’s arbitration agreement expressly strips Petitioner and other consumersof their statutory right to seek a public injunction for statutory violations. The Court of Appeal held that it had no choice but to countenance Defendant’s exculpatory contract language based onits reading of a couple of recent federal court FAA preemption cases. But the United States Supreme Court hasnot itself decided whether the FAA preemptsstate rules precluding the arbitration of statutorily-based public injunction claims and the federal cases cited by the Court of Appeal are not well-reasoned — and are unquestionably contrary to existing California Supreme Court authority as set forth in Broughton and Cruz. Indeed, the decision below provides this Court the opportunity to resolve the standing conflict between the G 2 Ninth Circuit and this Court on an importantissue of California law. Plenary review underCalifornia Rule of Court 8.500(b)(1) is required to resolve these conflicts and to settle vital questions of law. In the alternative, the Court should grant review andtransfer the case back to the Court of Appeal with instructions to apply Broughton and Cruz and affirm the trial court’s ruling that found McGill’s claims fora public injunction under the UCL, the FAL and the CLRA should not be compelled to arbitration. Finally, even if the Court finds the Broughton-Cruz rule abrogated, it should issue a grant and transfer order based on the unconscionability analysis in Sonic-CalabasasII. STATEMENT OF THE CASE Citibank marketed a type of credit insurance called “Credit Protector”to its credit card holders in California, representing that this plan permits its cardholders facing hardship to avoid becoming delinquent and protect their financial well-being. (1 Clerk’s Transcript [“CT”] 2 [94]; 1 CT 4 [917]; 1 CT 8 [§ 30].) McGill is a cardholder who purchased and paid a monthly premium for the Credit Protector plan. (1 CT 4 [J 18]; 1 CT 8 [14] 33, 36].) However, the plan’s limitations and conditions of coverage are so numerous and complex that obtaining benefits is extremely difficult or impossible. (1 CT 5-8 [ff 21-30].) McGill would not have purchased the plan had Citibank informedher of these limitations and conditions. _ (1 CT 8 [§ 36].) In marketing the plan to her, Citibank failed to make any effort to determine whether she would actually beeligible to receive benefits. (1 CT 35 [§ 8].) In addition, McGill alleged that Citibank systematically processes claims in such a wayasto delay or deny benefits despite the consumer’seligibility for them. (1 CT 7-9 [J 29-32, 43].) McGill filed a class action complaint against Citibank on May 27, 2011, arising out of Citibank’s performance under and marketing ofthe Credit Protector plan to its credit card holders in California, including herself. (1 CT 1-2 [J 2-3].) She sued on her own behalf and on behalf of a proposed class of California residents whoare or were enrolled in the plan at any time from fouryearspriorto the filing of the complaint until class certification. (1 CT 9-10 [§] 46-47].) She alleges causes of action for violations of the following: (1) the UCL; (2) the FAL; (3) the CLRA; and (4) Insurance Code sections 1758.9 ef seg. (impropersale of insurance). (1 CT 1.) She seeks monetary damages,restitution, and injunctive relief to prevent Citibank from continuing improperly to market and execute the plan. (1 CT 23-24 [99 1-13].) Citibank filed a petition to compel McGill to arbitrate her claims on an individual basis on August 26, 2011. (1 CT 31.) McGill opposed the petition, arguing,inter alia, that the claims forinjunctive relief under the UCL, the FAL, and the CLRA are notarbitrable. (See generally 3 CT 870- 73.) The trial court granted the petition in part and deniedit in part. (Slip op. at 5.) It severed and stayed the claims for injunctive relief underthe UCL, FAL, and CLRA,butorderedall otherclaimsto arbitration, including the claimsforrestitution and damages under the UCL, FAL, CLRA,and Insurance Code. (/d.) Based on the Broughton-Cruzrule, the trial court refused to order arbitration of the injunctive relief claims. (/d.) Citibank appealed this portion ofthe ruling. Soonafter the hearing on the appeal, the Court of Appeal issued a published decision on December18, 2014, reversingthe trial court’s order and remandingforthetrial court to orderall claims to arbitration. The . Court of Appeal concluded that the FAA preempts the Broughton-Cruz rule. (Slip op. at 2.) McGill filed a timely Petition for Rehearing on January 2, 2015. Petitioner argued that, even if Broughton-Cruz rule were preempted, the trial court’s order denying in part Citibank’s motion to compelarbitration should be affirmed because the at-issue agreement completely prohibits an arbitrator from awarding public injunctiverelief. Specifically, the agreement provides that “[a]n award in arbitration shall determinethe rights and obligations between the namedparties only . . . and shall not have any bearing on the rights and obligations of any other person, or on the resolution of any otherdispute.” (1 CT 109.) It further providesthat “[t]he arbitrator will not award relief for or against anyone whois not a party,” and the arbitrator “may award relief only on an individual (non-class, non- representative) basis.” (1 CT 109, 110.) These provisions, which amount to a total bar on McGill’s right to pursue statutory remedies—public injunctive relief under the UCL, FAL, or CLRA—runsafoul of one of the chief limitations on FAA preemption, as announced by the United States Supreme Court: that an arbitration agreement may not force a “prospective waiverof a party’s right to pursue statutory remedies.” (American Express Co. v. Italian Colors Restaurant (2013) 570 U.S. __ [133 S.Ct. 2304, 2310] [citations and quotations omitted, emphasisin original].). The Court of Appeal denied the Petition, stating that this argument had been waived, and declined to reach it. (Order Denying Petition For Rehearing, Jan. 7, 2015.) ARGUMENT I THE COURT OF APPEAL’S RULING THAT THIS COURT’S DECISIONS IN BROUGHTON AND CRUZ HAVE BEEN ABROGATED REQUIRES REVIEW A. Consistent With United States Supreme Court Precedent, Broughtonand Cruz Hold That Claims Seeking Public Injunctive Relief Under the UCL, FAL and CLRA Are. Not Arbitrable Based on an Inherent Conflict with Arbitration Both Broughton and Cruz found that a narrow exception to FAA preemption applies to public injunctions brought under California’s consumerlaws. In Broughton, the Court considered the arbitrability of claims brought under the CLRA against a defendant whoallegedly misrepresented the quality of medical services provided underits health care plan in its advertisements. The plaintiffs sought damages and an order enjoining the deceptive practices, arguing that their claims under the CLRA were not subject to arbitration. (Broughton, supra, 21 Cal.4th at p. 1072- 1073.) In Cruz, the plaintiffs brought claims under the UCL and FAL seeking restitution, disgorgement, and injunctiverelief for unfair competition and false advertising in the defendant’s sale, marketing, and rendering of medical services. (Cruz, supra, 30 Cal.4th at p. 307.) The plaintiffs in Cruz argued that their UCL and FAL claims wereinarbitrable. (/d. at p. 310.) The Court in both cases highlighted the federal statutory mandate and strong public policy in favor of enforcing arbitration agreements. (Broughton, supra, 21 Cal.4th at p. 1073; Cruz, supra, 30 Cal.4th at pp. 311-312.) The Broughton and Cruz Courts enforced the arbitration agreements in both casesfor the claims of damages,restitution, and disgorgement. The Broughion Court foundthat statutory damages claims under the CLRA are fully arbitrable. (/d. at p. 1084.) Similarly in Cruz, the Court found that the restitution and disgorgement claims under the UCL were arbitrable. (Cruz, supra, 30 Cal.4th at pp.317, 320.) The Courts thus invalidated the lower court decisions to the extent they exempted certain private claims, such as those for damagesandrestitution, from arbitration. However, the Court in each case distinguished the right to pursue the statutory remedy of public injunctiverelief from private statutory remedies. Broughton foundthat claimsfor injunctive relief under the CLRA designed to protect the public from deceptive business practices were not subject to arbitration. (Broughton supra, 21 Cal.4th at p. 1080.) The Court extended this holding in Cruz to claims for injunctive relief under the UCL and FAL. (Cruz, supra, 30 Cal.4th at p. 307.) To be sure, the Broughton-Cruz rule 1s not simply a generic rule that all injunction claimsare inarbitrable. The Broughton-Cruz rule is more nuanced andreflects a narrow exception to the FAA based on the inherent conflict between arbitration and the statutes’ purposes. The Broughton- Cruz Courts found two factors combined to lead to an inherent conflict. “First, that relief is for the benefit of the general public rather than the party bringing the action.” (Broughton, supra, 21 Cal.4th at p. 1082.) In Cruz, the request for injunctive relief was for the benefit of health care consumers and the general public to enjoin the defendant’s alleged deceptive advertising practices, which was “virtually indistinguishable from the CLRA claim that wasat issue in Broughton.” (Cruz, supra, 30 Cal.4th atp. 315.) Second, the “institutional shortcomingsof private arbitration in the field of such public injunctions” rendered the statutory remedy of a pubic injunction unavailable in arbitration. (/d. at 1081.) Given the limitations regarding enforcement and maintenanceofa public injunction, “an arbitrator lack[s] the institutional continuity and the appropriate jurisdiction to sufficiently enforce and, if needed, modify a public injunction.” (Cruz, supra, 30 Cal.4th at p. 312.) Unlike courts, which have continuing jurisdiction over a public injunction and can enforce such a public remedy, arbitrators do not retain continuing jurisdiction over a claim in arbitration and arbitration awards do not affect and cannot be enforced by non-parties. (Broughton, supra, 21 Cal.4th at pp. 1081-1082. This defeats a primary purpose of the public injunction when “only the parties to the injunction would be able to enforce it, although the injunction is public in scope.” (/d. at p. 1081.) In this narrow area, where the statutory remedy serves a purely public purpose and would be unavailable in arbitration, relief must proceed in the court forum. These two critical factors distinguish public injunctions from private remedies. Importantly, the Broughton and Cruz Courts carefully harmonized their holding with the principles of the FAA stated in U.S. Supreme Court case law. The Broughton and Cruz Courts specifically recognized that “the United States Supreme Court has on numerousoccasions invalidated laws and judicial decisions that disfavored arbitration.” (Broughton, supra, 21 Cal.4th at p 1074.) Both Broughton and Cruz underscored that since the seminal arbitration case of Southland Corp. v. Keating (1984) 465 US. 1, whichrejected a rule that certain claims under California’s Franchise Investment Law werenot subject to arbitration, the United States Supreme Court “has rejected numerous efforts and arguments by state courts, federal courts and litigants to declare certain classes of cases not subject to arbitration.” (Cruz, supra,30 Cal.4th at p. 311; Broughton, supra, 21 Cal.4th at pp. 1074-1075; see, e.g., Perry v. Thomas (1987) 482 U.S. 483 [finding that section 2 of the FAA preemptedprovisions of the California LaborCodethat insulated claims concerning the collection of wages from agreements to arbitrate].) The Broughton Court noted that the United States Supreme Court madeclear in various cases after Southland “that arbitration may resolve statutory claimsas well as those purely contractual if the parties so intend,and that in doing so, the parties do not forego substantive rights, but merely agree to resolve them in a different forum.” (Broughton, supra, 21 Cal.4th at p. 1075 [citing Mitsubishi Motors v. Soler Chrysler-Plymouth (1985) 473 U.S. 614 and Shearson/American Express, Inc. v. McMahon(1987) 482 U.S. 220].) Yet, the United States Supreme Court also has foundthat not all controversies implicating statutory rights are suitable for arbitration, with such unsuitability evident whenthere is an “inherent conflict” between arbitration andthe statute’s purpose. (Broughton, supra, 21 Cal.4th at p.1075 [citing Mitsubishi Motors and Gilmerv. Interstate/Johnson Lane Corp. (1991) 500 U.S. 20].) Finding an inherent conflict in the case before it, Broughton concludedthat its holding was not preempted by the FAA because the FAA does not “compel states to permitthe vitiation through arbitration ofthe substantive rights afforded” by such statutes. (Broughton, supra, 21 Cal.4th at p. 1083.) Indeed, the United States Supreme Court has emphasized that it would “condemn[]. . . as against public policy”an arbitration agreement that operated “as a prospective waiverofa party’s right to pursue statutory remedies.” (Mitsubishi, supra, 473 U.S. at p. 637, fn. 19.) The United States Supreme Court has also emphasizedthat arbitration may notbe precluded “so longas. . . the guarantee ofthe legal power to imposeliability--is preserved.” (CompuCredit v. Greenwood (2012) 565 U.S. [132 S.Ct. 665, 671] [emphasis in original].) That 10 guarantee is not available here because the arbitral forum lackstheability to issue and enforce public injunctions, as recognized by the California Supreme Court. The Courts in Broughton and Cruz did not find a categorical exemption from arbitration based on a mere policy preference for litigation. These decisions are rooted in a concise analysis of the nature of public injunctions and the “institutional shortcomings”ofarbitration in enforcing public injunctions. Further, thefact that remedies understate statutes (rather than federal statutes) are at issue does not change Broughton and Cruz’s preemption analysis. While the United States Supreme Court has applied the “inherent conflict” exception to the arbitrability of federal statutory claims, it “has neverdirectly decided whethera legislature mayrestrict a private arbitration agreement whenit inherently conflicts with a public statutory purpose that transcendsprivate interests.” (Broughton, supra, 21 Cal.4th at p. 1083; see Cruz, supra, 30 Cal.4th at p. 313.) The Cruz Court observed that the United States Supreme Court has neverprohibited a state from restricting a private arbitration agreement that inherently conflicts with a law primarily serving a public purpose. (Cruz, supra, 30 Cal.4th at p. 313.) Extending the FAA in such a mannerto extinguish a remedy enacted for a wholly public purpose would be “perverse.” (Broughton, supra, 21 Cal.4th at p. 1083.) Given the legislative history of the FAA and the drafters of the FAA’s primary focus on theutility of arbitration in resolving ordinary commercial disputes, the Broughton-Cruz Courts found that “it is doubtful Congress would have envisioned the extensions of the FAAto enforce arbitral jurisdiction over a public injunction.” (/d. at 1084.) Broughton and Cruz’s reasoning prefigured Justice Chin’s concurrence in /skanian, which providedthat state statutory claims or remedies cannot be extinguished prospectively. (/skanian, supra, 59 Cal.4th at p. 395 [noting that the Court’s holding invalidating a waiver of 1] the right to bring a PAGA,state statutory, claim in any forum “does not run afoul of the FAA”].) Likewise, a numberof federal courts, including the U.S. Supreme Court, have held that state statutory rights may not be vitiated by a total waiverin an arbitration agreement. (See e.g., Preston v. Ferrer (2008) 552 U.S. 346, 359 [substantive rights provided by the California Talent Agencies Act cannotbe extinguished byarbitration agreement]; Kristian v. Comcast Corp. (1st Cir. 2006) 446 F.3d 25, 44-60, 64 [invalidating provisions of an arbitration agreement that prevent the vindication of statutory rights under state and federal law]; Bookerv. Robert HalfInternational (D.C. Cir. 2005) 413 F.3d 77, 79-83 [finding an arbitration clause unenforceable becauseit precluded an award of punitive ‘damagesthat are available under District of Columbia law].) The Court of Appeal dismissed thesecases, finding that for Kristian and Booker, those courts “applied the exception to state statutory rights without considering whetherthe exception’s underlying rationale supportedits application to state statutory rights.” (Slip op. at p. 17.) Nonetheless, those courts dealt with the vindication of rights as applied to state statutory rights, which is directly at issue here, necessarily finding that the effective vindication of statutory claims encompasses state claims. The Court of Appeal decision conflicts with these clear rulings, necessitating a resolution by this Court. In short, the Court of Appeal sent all of McGill’s claims underthe CLRA,the UCL, and the FALto arbitration in contravention ofBroughton and Cruz. The effect of the Court of Appeal’s decision is to preclude McGill from obtaining a public injunction altogether, despite the Broughton-Cruz rule. Given the real consequences of the Court of Appeal’s ruling,it is crucial that this Court weigh in on the continued viability of the Broughton-Cruz rule. 12 B. The Court of Appeal’s Refusal to Follow Controlling California Supreme Court Cases Has Now Created a Split In Authority 1. The Court of Appeal Cannot Flout Controlling California Supreme Court Authority By holding that two California Supreme Court cases, Broughton and Cruz, have both been abrogated, the Court of Appeal has caused disarray in the law that can only be resolved by this Court. At the outset, the Court of Appeal concluded on its own that “the Broughton-Cruz rule falls prey to AT&TMobility’s sweeping directive.” (Slip op. at 3.) Yet Concepcion addressed only the Discover Bank rule and whetherclass action waivers in arbitration agreements are enforceable. Concepcion concludedthata state law “cannot require a procedurethatis inconsistent with the FAA, evenifit: is desirable for unrelated reasons.” (Concepcion, 131 S.Ct. at p. 1753 . [emphasis added].) Here, the availability of the class action “procedure” for resolving underlying substantive claims is not at issue. What is at stake is the availability of a substantive statutory right. Neither Concepcion nor any other Supreme Court case has held that an actualright to pursue statutory remedies can be completely foreclosed by use of an arbitration agreement, and the Court of Appeal's misreading of Concepcion to abrogate . binding authority must be corrected. Review is necessary because only the California Supreme Court can overrule its own decisions. “Although the California Supreme Court is free to overrule its own prior decisions, the doctrine of stare decisis compels lowercourt tribunals to follow the Supreme Court whateverreason the intermediate tribunals might have for not wishing to do so.” (Mehrv. Super. Ct. (1983) 139 Cal.App.3d 1044, 1049, fn. 3.) Undersuch longstanding principles of stare decisis, the California Supreme court has explained that the Court of Appeal wasnotfree simply to “overrule”the higher court's decisions here. (Au/o Equity Sales, Inc. yv. Super. Ct. (1962) » 15 57 Cal.2d 450, 455.) 2. The Court of Appeal’s Decision Conflicts With This Court’s Recent Jurisprudence And Must Be Reviewed By holding that an arbitration agreement must be enforced even where enforcement would eliminate a statutory remedy forthe public’s benefit, such as the public injunction under the UCL, CLRA, and FAL,the Court of Appeal contravenes this Court’s jurisprudenceprotecting statutory rights from forfeiture—aprinciple reaffirmed in two significant post- Concepcion cases, Sonic LI and Iskanian. The conflict is particularly stark because the Court ofAppeal does not appear to have considered whether the Broughton-Cruzrule conflicts with the fundamental attributesof arbitration—namely “lowercosts, greater efficiency and speed, and the ability to choose expert adjudicators to resolve specialized disputes” (Sonic IT, supra, 57 Cal4th at p. 1143)-—that is necessary to finding FAA preemption. This Court haslong held that “parties agreeing to arbitrate statutory claims must be deemedto consentto abide by the substantive and remedial provisions of that statute. Otherwise a party would not beable to fully ‘vindicate his or herstatutory rights in the arbitral form.” (Armendariz v. Foundation Health Psychcare Svcs., Inc. (2000) 24 Cal.4th 83, 101 {internal citations and quotations omitted].) This principle is not altered by Concepcion, which, as this Court found in Sonic I/, expanded the scope of FAA preemption to coverstate rules that interfere with the “fundamental attributes” of arbitration. In Sonic I, the employer-defendant soughtto bypass the Berman hearinginitiated by the plaintiff’s filing a claim under the Labor Code with the Labor Commissioner, and enterarbitration immediately. (SonicI, supra, 57 Cal.4th at p. 1126.) Reconsidering its earlier decision, which held that a state rule 14 preservinga litigant’s right to conduct a Berman hearingbeforearbitration commencesis not preempted, the Court in Sonic I foundthat requiring a Bermanhearingin all cases would cause substantial delay, interfering with a “fundamental attribute” of arbitration as defined by Concepcion, and is thus preempted by the FAA.(57 Cal.4th at p. 1141.) However, the Court also held that unconscionability “remainsa valid defense to a petition to compel arbitration,” and that, even after Concepcion, courts may apply a state rule on unconscionability as long as that rule does not “mandate proceduralrules that are inconsistent with fundamentalattributes of arbitration” of speed, efficiency, informality and lower costs. (/d. at pp. 1142&1145.) Sonic IJ confirmsthat a state rule that does not interfere with fundamentalattributesof arbitration is not preempted. Here, the Court of Appeal did not find that the Broughton-Cruz rule interfered with the fundamentalattributes of arbitration of speed, efficiency, or lowercosts. Andit could not; a public injunction is merely a remedy to be issued after a finding on the merits. A public injunction does not requirelitigants to undertake the cumbersome and expensive class procedure that requires a certification motion, notice, and opt-outs that this Court in Jskanian held to interfere with the fundamentalattributes ofarbitration. (See Jskanian, supra, 59 Cal.4th at pp. 562-564.) The Court of Appeal’s decision is inconsistent with the reasoning of Sonic II. However, Sonic J/ did not address an unwaivable statutory right, but merely a statutory protection for a low-wage litigant pursuing his or her wage Claims. This Court’s subsequent opinion in /skanian makesclearthat an unwaivable rightfor the public’s benefit is not preempted by the FAA so long as that right does not interfere with the fundamentalattributes of arbitration. /skanian confirmsthat the Broughton-Cruz rule has not been preempted. 15 In analyzing the waivability ofthe right to pursue civil penalties under the Attorneys General Act of 2004 (“PAGA”), Iskanian recognized that the FAA appliesonly to private disputes, such as a suit by “employee A to bring a suit for the individual damagesclaims of employees B, C, and D.” (Uskanian, 59 Cal.4th at p. 387.) Iskanian distinguished such a scenario from a PAGAclaim, the “fundamental character” of whichis as a “public enforcementaction.” (/d. at p. 388.) This limitation to the FAA applies to claims seeking public injunctive relief under California’s consumerprotection statutes. First, as the California Supreme Court has recognized,a plaintiffpursuing public injunctive relief under the UCL, CLRA and FAL on behalfofthe general public doesso as a bonafide.private attorney general, as she is seeking not “to resolve a private dispute but to remedy a public wrong.” (Broughton, supra, 21 Cal.4th at pp. 1079-80.) Thus, the pursuit ofpublic injunctive relief under the California consumerprotection statutes falls squarely within the “public enforcement action” exception to FAA coverage recognized by the Supreme Court in /skanian. Indeed, California courts have expressly notedthe similar public nature of both suits seeking PAGA penalties and those seeking public injunctive relief under the UCL, CLRA, and FAL. (See Brown v. Ralphs Grocery Co. (2011) 197 Cal.App.4th 489, 501.) Thus, under Iskanian, the FAA simply does not cover such a remedy, to the extent that public injunctive relief is sought. (Iskanian, supra, 59 Cal.4th at pp. 387-388.) In other words,the limitation to the FAA recognized in Iskanian applies with equal force to claims for injunctive relief under California's consumerprotectionsstatutes. Plaintiffs pursuing public injunctiverelief under the UCL, CLRA,and FAL on behalf of the general public do so as private attorneys general notto “to resolve a private dispute but to ‘remedy a public wrong.’” (Broughton, supra, 21 Cal.4th at pp.1079-1080.) 16 Pursuing public injunctive relief underthe California consumerprotection statutes comes within the “public enforcement action” exception to FAA coverage recognized in Jskanian. As another court expressly noted, there is a similar public nature to suits seeking PAGA penalties and those seeking public injunctive relief under the UCL, CLRA, and FAL. (Brown, supra, 197 Cal.App.4th at p. 501 [“Here, the relief is in large part ‘for the benefit of the general public rather than the party bringingthe action’ . . . , just as the claims for public injunctive relief in Broughton and Cruz.”].) To the extent that public mjunctive relief is being pursued, under Jskanian the FAAdoes not preempt a state law holding that the pursuit of such claimsis ‘ -unwaivable. Thus, the Broughion-Cruz rule falls outside the scope of FAA preemption as defined by Sonic II and Iskanian. If the decision below stands and the Broughton-Cruz rule is preempted, the result would not be an arbitrator (ratherthan a judge) issuing and enforcing the public myunction remedy;rather, it would result in the loss of that claim based on the institutional shortcomings ofthe arbitral forum as explained by Broughton and Cruz, a consequence not countenanced by this Court’s recent decisions. Review is therefore necessary to ensure that any decision regarding the viability of the Broughton-Cruz rule is in line with this Court’s jurisprudencein Sonic I and Iskanian. Further, although Petitioner believes that the Broughton-Cruz rule should remain intact, there are several alterative proceduresthat could be implemented that will preserve the public injunction remedy from forfeiture while remaining consistent with the FAA’s liberal policy favoring enforcementof arbitration agreements. One alternative might be to authorize the arbitrator to make certain preliminary findings and then have a trial court maintain jurisdiction to issue a public injunction based on the arbitrator’s findings. This would leave the merits determination to the 17 arbitrator while preservingtheability of the plaintiff to obtain a public injunction against a defendantif the arbitrator’s findings so warrant. Such a procedure—orother procedures that may be contemplated bythis Court—would honorthe parties’ agreementto arbitrate the dispute, while not forcing the plaintiff to give up the statutory right to a public injunction, which is what the Court of Appeal required and would becomelaw if not reviewed by this Court. . Moreover, even assuming that the Broughton-Cruzrule is abrogated, where enforcing the arbitration agreement would entail the loss of statutory benefits, the party resisting arbitration is entitled to an unconscionability defense asset forth in Sonic IT: ~ [W]here, as here, a particular class has been legislatively afforded specific protections in order to mitigate the risks and costs of pursuing certain types of claims, and to the extent that these protections do not interfere with fundamental attributes of arbitration, an arbitration agreement requiring a party to forgo those protections may properly be understood not only to substitute one dispute forum for another, but also to compel the loss of a benefit. The benefit lost is not dispositive but may be one factor in an unconscionability analysis. (Sonic I, supra, 57 Cal.4th at p. 1152.) Here, McGill relied on this Court’s opinions in Broughton and Cruz at the trial court without the benefit of Sonic I. If there is an intervening changein law, and the Broughton-Cruz rule is found to be abrogated in whole orin part, McGill should be afforded the opportunity to present an unconscionability defense, which wasnot forfeited by her“given the state of the law at the time.” (See Sonic JI, supra, 57 Cal.4th at p. 1158 [finding that plaintiff did not waivehis right to invoke an unconscionability defense by initially pursuing, in the trial court, a public policy argument that wasviableat the time].) Underthe reasoning 18 of Sonic I, the inability to pursue a benefit conferred by statute—such as the public injunction remedy—would bean integral part of a new test. Ata minimum,this Court should issue a grant and transfer orderfor further consideration in light of Sonic II. 3. The Court of Appeal’s Ruling Also Conflicts With Decisions From Its Sister Courts If left undisturbed, the Court of Appeal’s decision would leave . standing a conflict with other intermediate courts that have affirmed Broughton and Cruz or continued to follow the reasoning of those cases. First, numerous Courts of Appeal have applied the Broughton-Cruz rule in various opinions following their issuance. (See, e.g., Clark v. First Union Securities, Inc. (2007) 153 Cal.App.4th 1595, 1607 [“The parties agree that the eight cause of action [under the UCL] for injunctiverelief is not subject to arbitration,” citing Broughton and Cruz]; Gutierrez v. Autowest, Inc. (2003) 114 Cal_App.4th 77, 95 fn. 14 [“The CLRA was enacted for a public purpose and provides unwaivable rights.”]; Coast Plaza Doctors Hospital v. Blue Cross ofCalifornia, (2000) 83 Cal.App.4th 677, 692 [finding the plaintiffs “requests for injunctive relief for the benefit of the public at large . . . are the only requests forrelief that are inarbitable,” citing Broughton].) Second, because the Court of Appeal’s decision is not binding on sister courts, plaintiffs will continue to invoke the Broughton-Cruz rule, and intermediate courts will continue to struggle with this conflicting authority, as was the case prior to the decision below. (See, e.g., Ramos v. Fry’s Electronics, Inc. (Nov. 17, 2014, No. B246404) 2014 Cal.App.Unpub. LEXIS 8210, * 45 [“[W]e consider[the plaintiff's] assertion that, under Cruz... his claim of injunctive relief under section 17200 is not arbitrable.” ]; Brown v. Automobile Club ofSouthern California (July 31, 2013 No. B241995) 2013 Cal.App.Unpub. LEXIS 5410, * 2 [“{I]Jn 19 accordance with Cruz... any request by plaintiff for ‘public injunctive’ relief is not subject to arbitration.” ]; Tri-City Healthcare District v. Scripps (March 29, 2012, No. D057878) 2012 Cal.App. Unpub. LEXIS 2445, *25 [“To the extent [the plaintiff] is pleading that the public interest is involved . . the injunctive relief claims under the UCL wouldnotbearbitrable.”].)! Third, the decision below lends further confusion regardingthe viability of the Broughton-Cruz rule examinedin dicta by intermediate courts in the wake of Concepcion. Forinstance, in the one California appellate court case identified by the Court of Appealthat addresses whether Broughton and Cruz are preempted by the FAA, Nelson v. Legacy Partners Residential, Inc. (2012) 207 Cal.App.4th 1115, the appellant had forfeited the issue and the appellate court based its conclusion on a federal’ opinion Kilgore v. KeyBank, N.A. (9th Cir. 2012) 673 F.3d 947 (“Kilgore I’) that was eventually vacated by the en banc court in Kilgore v. KeyBank, N.A. (9th Cir. 2013) 718 F.3d 1052 (“Kilgore IP’). Kilgore II refused to even considerif the Broughton-Cruz rule was preempted andinstead concluded thatthe plaintiff's claimsat issue did notfall within the purview of the Broughton-Cruz rule. (Kilgore Il, supra, 718 F.3d at p. 1060-1061.) Kilgore II expressly discussed when the Broughton-Cruz rule applied, which included whenthebenefits of injunctive relief accrue to the general public. (/d. at p. 1060.) It noted that any of the concerns Broughton had overthe institutional shortcomings of private arbitration in the field of public injunctions were not present, as the defendant’s alleged statutory violations had ceased andthe injunctive relief sought would only benefit the putative class memberswith noreal benefit to the public at large. (/d. ' Although these are unpublishedcases, they are not cited for any precedential value orthe validity oftheir rulings, and are only raised to demonstrate that the rule in Broughton-Cruz has been applied in recent court cases. 20 at p. 1061.) Ne/son’s reliance on a vacated opinion notonly renders the reasoning suspect, neither Ne/son nor Kilgore applies to thefacts ofthis case, where McGill alleges that Citibank’s wrongful conduct continues and impactsthe public interest. (1 CT 13 [J 66]; 14 [J 71-74]; 1 CT 20 [ 107].)° Additionally, the confusion is exacerbated by the Court of Appeal’s notable omission of cases that continue to cite Broughton and Cruz favorably post Concepcion. (See, e.g., Brown v. Ralphs, supra, 197 Cal.App.4th 489, 501.) Brownitself draws from the reasoning of Broughton and Cruz to find that representative actions under the PAGA do not conflict with the purposes of the FAA,as “therelief is in large part ‘for the benefit of the general public rather than the party bringingthe action’. . . Just as the claims for public injunctiverelief in Broughton and Cruz.” (id. [quoting Broughton, supra, 21 Cal4th at p. 1082].) Brown underscores the close connection between the right to pursue public injunctions under California’s consumerprotection statutes and theright to pursue civil penalties under the PAGA on a representative basis, adopting the rationale of Broughton and Cruz with respect to remedies for the public benefit. In short, the Court ofAppeals decision leaves many open questions and hascreated a split of authority requiring plenary review. * McGill alleges that Citibank fails to disclose all the terms and limitations of its Credit Protector plan and engages in deceptive and misleading advertising, including preventing consumers who purchase the plan from obtaining the services or continuing to charge consumers who do not even qualify for the benefits underthe plan. (1 CT 12 [9§ 56-60].) Such conduct offends public policy and causes substantial injury to consumers. (1 CT 13 [§67].) Further, McGill alleges that such conduct continues “[t]o this day.” (See, e.g., 1 CT 20 [] 107]; 1 CT 14 [$9 71-74].) 2] 4, Plenary Review Would Also Resolve a Conflict Between State and Federal Authority Regarding the Viability of the Broughton-Cruz Rule The Court of Appeal announcedthatit is “join[ing] several federal court decisions in concluding the Federal Arbitration Act . . . preempts the Broughton-Cruz rule.” (Slip op. at 2.) It noted that federal district courts weresplit on the issue and then found that Ferguson v. Corinthian Colleges, Inc. (9th Cir. 2013) 733 F.3d 928, 934-937, resolved this conflict ' by finding the Broughton-Cruz rule preempted. (Slip op. at 13.) Ferguson and the federaldistrict court cases in accord with it generally base their conclusion on a broad construction of Concepcion. However, that the Court of Appeal found support forits position in Ferguson only bolsters the case for review for several reasons. _ First, Fergusonfailed to reconcile the dictum in Concepcion that “state law may not prohibit outright the arbitration of a particular type of claim,” with other Supreme Court precedent finding unequivocally that an arbitration agreement may not force a “prospective waiver of a party’s right to pursue statutory remedies.” (American Express, supra, 133 S.Ct. at p. 2310] [citations and quotations omitted, emphasis in original].) The American Express Court found that the desire to prevent such waiver would “certainly cover a provision in an arbitration agreement forbidding the assertion of certain statutory nghts.” (/d.) Forcing UCL, CLRA, and FAL claims seeking solely public injunctive relief to arbitration would affect such a waiver, creating a conflict with American Express. Second, while Ferguson questioned Broughton’s discussion that public injunctions are beyond arbitrators’ powers, it failed to address any of the specific “institutional shortcomings” the Broughton Court detailed, including the limitations that arbitrators are not able to maintain supervision over public injunctions or modify or vacate them. (Broughton, supra, 21 22 Cal.4th at p. 1081.) Third, Ferguson failed to consider that the "outright prohibition" principle(the rule against states prohibiting outright the arbitration of a particular type of claim, Concepcion, supra, 131 S.Ct. at p. 1747) stems from pre-Broughion United States Supreme Court precedent, such as Southland and Perry, whichrejected any efforts to declare certain classes of cases not subject to arbitration. Both Broughton and Cruz discussthe principles espoused by this precedent, which was not new to Concepcion. In fact, Broughton and Cruz were able to bring their holdingsin line with Perry and Supreme Court precedent, as discussed in more detail above. Because the Court of Appeal simply looked to Concepcion’s recitation of a preexisting law, a law that Broughton and Cruz fully considered, to find that those two higher court decisions were abrogated, the Court of Appeal decision merits review. _ | Fourth, Kerguson predates [skanian, whichis controlling and viewed Concepcion more narrowly, holding that the FAA does not cover“public enforcementactions,” such as suits seeking civil penalties under the PAGA. This reasoning also applies to public enforcement actions suchas suits seeking public injunctiverelief. Further, the court in Ferguson did not have the benefit of Justice Chin’s concurrence in /skanian, which also reasoned that state statutory claims or remedies cannotbe extinguished prospectively, while Ferguson mistakenly held that the “effective vindication exception” applies only to federal statutory claims. (See Ferguson, supra, 733 F.3d at p. 936.) Ferguson instead relied on dicta from Justice Kagan’s dissent in American Expressforthis point, even though the majority did not so limit its analysis on prospective waivers to only federal statutes. (See American Express, supra, 133 S.Ct. at p. 2320 [dissenting opn. of Kagan, J].) Moreover, Ferguson is not controlling on this Court. “[D]ecisions by the federal courts of appeal are not binding on us.” (People v. Williams (2013) 56 Cal.4th 630, 688.) The decisions of this Court “are binding upon and must be followed by all the state courts of California.” (Auto Equity Sales, supra, 57 Cal.2d at p. 455; People v. Super. Ct. (Moore) (1996) 50 Cal.App.4th 1202, 1211 [same].) It is not the function of the Court of Appeal “to attempt to overrule decisions of a higher court.” (/d.) The Court of Appeal here completely sidesteppedthis rule, finding that Broughton and Cruz are no longer viable based on conflicting federal authority. The Court of Appeals’ reliance on non-binding contrary federal authority merely demonstrates that this Court’s guidance is necessary to settle this issue. | Ultimately,this Court must be accorded an opportunity to decide the fate of its own priordecisions. Ferguson purports to invalidate two decisions from this Court withoutinviting this Court’s input. The decision below providesthis Court with a critical opportunity to review Ferguson’s reasoning and settle a standing conflict between the Ninth Circuit and this Court on an importantissue of California law. II. THE ARBITRATION AGREEMENT HERE PROHIBITS PUBLIC INJUNCTIONS FROM BEING AWARDEDIN ANY FORUM,IN VIOLATION OF FEDERAL AND STATE SUPREME COURT PRECEDENT Even if Broughton and Cruz were abrogated, andthe institutional shortcomingsof the arbitral forum did not effectively prevent Petitioner from obtaining a public injunctionin arbitration, here Citibank’s arbitration agreementalso expressly prohibits an arbitrator from awarding a public injunction. Enforcement of this agreement, which expressly precludes McGill from pursuing the statutory remedy of a pubic injunction eitherin court orin arbitration, conflicts with the non-waiverprinciple stated in Armendariz v. Found. Health Psychcare Svcs. (2000) 24 Cal.4th 83, 103 and American Express. 24 The Court of Appeal mistakenly foundthat this issue had been waived. (Order Denying Rehearing, Jan. 7, 2015.) However, there is no waiverwhenthereis an issue of public importance pertaining only to questions of law on undisputed evidence. (See Catchpole v. Brannon (1995) 36 Cal.App.4th 237, 244, overruled on other grounds by People v. Freeman (2010) 47 Cal.4th 993.) Here, the express language of Citibank’s arbitration agreement is undisputed. Taken together, the following language from Citibank’s arbitration agreementbars an arbitratorfrom . awarding a public injunction, which is a matter of public interest. The agreement provides that “[a]n award inarbitration shall determinethe rights and obligations between the namedparties only, and only in respect of the | - Claimsin arbitration, and shall not have any bearing on the rights and obligations of any other person,or on the resolution of any other dispute.” (1 CT 109.) The agreementalso states that “[t]he arbitrator will not award relief for or against anyone whois not a party.” (1 CT 110.) In addition, the agreement provides that “the arbitrator may award relief only on an individual (non-class, non-representative) basis.” (1 CT 109.) Broughton describes a public injunction under the CLRA asonethat benefits the general public in danger of being victimized by the same deceptive practicesthat the plaintiff suffered. (Broughton, supra, 21 Cal.4th at p. 1080. The injunction thus primarily benefits persons other than the party whobroughtthe suit because that party is already aware of the deception. The provision here, barring an arbitrator from awarding an injunction that may be enforced by consumersor the general public other than the person who broughtthe arbitration proceeding, therefore bars an arbitrator from awarding public injunctive relief. Moreover,this clearly violates established principles that arbitration agreements, which may not simply waivea substantive claim, also may not preclude a claimant from pursuing a statutory remedy. The California 25 Supreme Court has found that an adhesion arbitration agreement “cannot limit statutorily imposed remedies, such as punitive damages andattorneys’ fees.” (Armendariz, supra, 24 Cal.4th at p. 103 [invalidating a term limiting statutory remedies].)* If employers were able to exempt themselves from one-wayfee-shifting on employment claims—which protects public nghts through deterrence—theycould circumvent themselves from liability by the introduction ofan arbitration agreement. (ibid.) California law, consistent with the FAA,haslong heldthatthe “full range”of statutory remedies must be madeavailable to preserve the “substantive and remedial provisions of the statute.” (/bid.) Precluding McGill from pursuing a public injunction fails to preserve the substantive and remedial provisions of the statutes at issue, the CLRA, the UCL, and the FAL, which aim to curb deceptive practices affecting consumers, with the CLRAitself explicitly noting its intent to “protect consumers.” (Cal. Civ. Code § 1760.) Moreover, the FAA itself embodies a non-waiverprinciple, established by decades of United States Supreme Court case law, holding that arbitration agreements merely involve the forum in which claims may - be heard, but may not be used to eliminate claims from being heard anywhere. The United States Supreme Court recently reaffirmedthis principle in American Express, holding that courts cannot enforce terms in any agreement, arbitration or otherwise, that would eliminate theright to pursuea statutory claim orforce the prospective waiverof a party’s “right to pursue statutory remedies.” (American Express, supra, 133 S.Ct.at p. * This rule has been reaffirmed by Sonic-CalabasasII, supra, 57 Cal.4th at p. 1151, by affirming rules preserving one-way fee-shifting statutes from evisceration through an arbitration waiver. 26 2310.)’ Such a principle is at stake here when the termsofthe arbitration agreement preclude an arbitrator from awarding public injunctions, thereby prospectively forcing claimants like McGill to give up such remedies. These provisions in the agreementare clearly unenforceable under established precedent warranting review by this Court. I. IN THE ALTERNATIVE, THE COURT OF APPEAL’S RULING THAT BROUGHTON AND CRUZARE PREEMPTED AND NO LONGERVIABLE MERITS A GRANT AND TRANSFER ORDER The Court of Appeal refused to follow binding California Supreme Court precedent and instead relied on mistaken federal court authority to _ find that public injunctive relief claims under the CLRA, UCL, and FAL are arbitrable. In so ruling, the Court of Appeal “disregard[ed] the California Supreme Court’s decision[s] without specific guidance from [the] high court.” (Truly Nolen of.Americav. Super. Ct. (2012) 208 Cal.App.4th 487, 507.) The Court of Appeals ruling contravenesdirect, applicable California Supreme Court case law and warrants review. This Court may order review of a Court of Appeal decision for the purpose of transferring the matter to the Court of Appeal for such proceedingsas this Court may order. (Cal. Rules of Court, rule 8.500(b)(4); /d. at rule 8.528(d).) While this Court’s guidance is necessary to settle the conflict over whether such public injunctivereliefis arbitrable, in the alternative, the Court should grant review and transfer the case back to the Court of Appeals with instructions to apply Broughton and Cruz and affirm the trial court. Should the Court find that the Broughton-Cruzruleis abrogated in some manner,it should issue a grant and transfer order based * Justice Chin applied this principle to PAGA,findingthat the right to pursue state statutory remedies afforded under PAGA may not be foreclosed by an arbitration agreement. (/skanian, supra, 59 Cal.4th at p. 395.) 27 on the unconscionability analysis in Sonic-CalabasasII. CONCLUSION For the foregoing reasons, McGill respectfully requeststhat this Court grant plenary review of the Court of Appeal’s decision. In the alternative, McGill requests that this Court issue a grant and transferorder, granting review of the Court of Appeal decision and transferring the case back to that court with instructions to apply Broughton and Cruz and affirm the trial court. If Broughton and Cruz are found to be abrogated, this Court should issue a grant and transfer order based on Sonic-CalabasasII’s unconscionability analysis. Dated: January 27, 2015 Respectfully submitted, Capstone Law APC By: Raul Perez Glenn A. Danas Melissa Grant Liana Carter Attorneys for Plaintiff-Petitioner SHARON MCGILL 28 CERTIFICATE OF WORD COUNT Counselofrecord herebycertifies that, pursuant to the California Rules of Court, Rule 8.504(d)(1) and 8.490, the enclosed Petition for Review wasproduced using 13-point Times New Romantype style and contains 8,253 words. In arriving at that number, counsel has used Microsoft Word’s “Word Count” function. Dated: January 27, 2015 Respectfully submitted, Capstone Law APC : Glenn A. Danas Melissa Grant Liana Carter Attorneys for Plaintiff-Petitioner SHARON MCGILL 29 Filed 12/18/14 CERTIFIED FOR PUBLICATION IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FOURTH APPELLATE DISTRICT DIVISION THREE SHARON McGILL, Plaintiff and Respondent, G049838 V. (Super. Ct. No. RIC1109398) CITIBANK,N.A., OPINION Defendant and Appellant. Appeal from an order of the Superior Court of Riverside County, John W. Vineyard, Temporary Judge. (Pursuant to Cal. Const., art. VI, § 21.) Reversed and remanded. Stroock & Stroock & Lavan, Julia B. Strickland and Marcos D. Sasso for Defendant and Appellant. Capstone Law, Raul Perez, Melissa Grant, Glenn A. Danas and Katherine W.Kehrfor Plaintiff and Respondent. Plaintiff and respondent Sharon McGill sued defendantand appellant Citibank, N.A. (Citibank) for unfair competition and false advertising in offering a credit msurance plan she purchasedto protect her Citibank credit card account. Alleging claims under California’s unfair competition law (Bus. & Prof. Code, § 17200 et seq.; hereinafter UCL),false advertising law (Bus. & Prof. Code, § 17500et seq.; hereinafter FAL), and Consumer Legal Remedies Act (Civ. Code, § 1750 et seq.; hereinafter CLRA), McGill seeks monetary damages, restitution, and injunctive relief to prevent Citibank . from engaging in its allegedly unlawful and deceptive business practices. Citibank petitioned to compel McGill to arbitrate her claims based on an arbitration provision in her account agreement. Thetrial court grantedthe petition on McGill’s claims for monetary damagesandrestitution, but deniédthe petition on the injunctive relief claims. In doingso, the court relied on the “Broughton-Cruz rule”the California Supreme Court established in Broughton v. Cigna Healthplans (1999) 21 Cal.4th 1066 (Broughton), and Cruz v. PacifiCare Health Systems, Inc. (2003) 30 Cal.4th 303 (Cruz). Underthat state-law rule, arbitration provisions are unenforceable as against public policyif they require arbitration of UCL, FAL, or CLRA injunctive relief claims brought for the public’s benefit. Citibank appeals the trial court’s order on the inyunctive relief claims; McGill does not challenge the order on the claims for monetary damagesandrestitution. Wereverse and remand forthe trial court to orderall of McGill’s claims to arbitration. As explained below, we join several federal court decisions in concluding the Federal Arbitration Act (9 U.S.C. § 1 et seq.; hereinafter FAA) preempts the Broughton-Cruz rule. In AT&TMobility LLC v. Concepcion (2011) 563 U.S. [131 S.Ct. 1740] (AT&TMobility), the United States Supreme Court unmistakably declared the FAA preemptsall state-law rules that prohibit arbitration of a particular type of claim because an outright ban, no matter how laudable the purpose, interferes with the FAA’sobjective of enforcing arbitration agreements according to their terms. The Broughton-Cruzrule falls prey to AT&TMobility’s sweeping directive becauseit is a state-law rule that prohibits arbitration of UCL, FAL, and CLRA injunctive relief claims broughtforthe public’s benefit. Wemust reject McGill’s contention the California Supreme Court’s recent decision in Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348 (/skanian), “reaffirmed” the Broughton-Cruz rule. To the contrary, Jskanian confirmed the expansive scope of the FAA’s preemption and overturned anotherstate-law rule invalidating class action waivers on claims for arbitration of unpaid wages. Iskanian also established a new rule invalidating predispute waivers of an employee’s right to bring a representative action under the Labor Code Private Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.; hereinafter PAGA)to recovercivil penalties for an employer’s Labor Code violations. The /skanian court concluded the FAA did not preempt this new rule because a PAGArepresentative claim belongs to the state, and an aggrieved employee simply brings the claim as an agent orproxy ofthestate. Accordingly, a PAGArepresentative claim is not subject to a private arbitration agreement between an employerand an employee or the FAA. As explained below, a PAGArepresentative claim is not comparableto an injunctive relief claim underthe UCL, FAL, or CLRA,and therefore /skanian’s narrow exclusion does not save the Broughton-Cruz rule from preemption. FACTS AND PROCEDURAL HISTORY Citibank is a national banking association that offers consumersa variety of financial services, including credit card accounts and credit insurance plans. Underits “Credit Protector” plan, Citibank defers or credits certain amounts on a consumer’s Citibank credit card account when one or more qualifying events occur, such as long-term disability, unemployment, divorce, military service, and hospitalization. G o Citibank charges consumers who purchasethe Credit Protector plan a monthly premium based on the consumer’s credit card balance. McGill opened a Citibank credit card account and purchased the Credit Protector plan. The operative “Citibank Card Agreement” (Agreement) when McGill opened her account did not include an arbitration provision. Citibank, however,later sent McGill a “Notice of Change in Terms Regarding Binding Arbitration to Your Citibank Card Agreement” (Change in Terms Notice) that amended the Agreementto add an arbitration provision. The provisionstated, “Either you or we may, without the other’s consent, elect mandatory, binding arbitration for any claim,dispute, or controversy between you andus (called ‘Claims’).” The provision further provided, “All Claims relating to your accountor a prior related account, or ourrelationship are subject toarbitration, including Claims regarding the application, enforceability, or interpretation of this Agreementandthis arbitration provision. All Claims are subjectto arbitration, no matter whatlegal theory they are based on or what remedy (damages,or injunctive ordeclaratory relief) they seek. This includes Claims based on contract, tort (including intentionaltort), fraud, agency, youror ournegligence, statutory or regulatory provisions, or any other sources of law; ... and Claims made independently or with other claims. ... Claims and remedies sought aspart of a class action, private attorney general or other representative action are subject to arbitration on an individual (non-class, non-representative) basis, and the arbitrator may awardrelief only on an individual (non-class, non-representative) basis. [{] ..- [§] ... This arbitration provision is governed by the Federal Arbitration Act (the “FAA’). [f] ... [{] ... Claims must be brought in the nameofan individual personorentity and must proceed on an individual (non-class, non-representative)basis. The arbitrator will not award relief for or against anyone whois not a party. If you or we require arbitration of a Claim, neither you, we, norany other person may pursue the Claim in arbitration as a class action, private attorney general action orother representative action, nor may such Claim be pursued on youror ourbehalf in any litigation in any court.” Underthe Change in Terms Notice, McGill could have refused to accept the arbitration provision by sending Citibank written notice within 26 daysofthe closing date for her next account statement. If McGill opted out, she could have continued to use _. hercredit card underthe existing terms “until the end of [her] current membership year or the expiration date on [her] card(s), whicheveris later.” McGill did not opt outof the arbitration provision. In 2011, McGill filed this class action based on Citibank’s marketing of the Credit Protector plan and the manner in which Citibank administered McGill’s claim underthe plan when she lost her job in 2008. The operative complaint alleges claims against Citibank for (1) violation of the UCL; (2) violation of the FAL;(3) violation of the CLRA; and (4) impropersale of insurance (Ins. Code, § 1758.9). The relief McGill seeksincludesrestitution, monetary and punitive damages, attorney fees and costs, and injunctiverelief enjoining Citibank from continuing to engagein its allegedly illegal and deceptive practices. Citibank filed a petition to compel McGill to arbitrate her claims on an individual basis as required by the Agreement’s arbitration provision. Thetrial court granted the petition in part and deniedit in part. Specifically, the court severed and stayed the claims for injunctive relief under the UCL, FAL, and CLRA,andordered McGill to arbitrate all her otherclaims, including claims forrestitution and damages under the UCL, FAL, CLRA,and Insurance Code. Despite finding the Agreement’s arbitration provision applied to all of McGill’s claims, the trial court refused to order arbitration of the injunctive relief claims based on the California Supreme Court’s Broughton-Cruz rule. Citibank timely appealedthetrial court’s decision refusing to require McGill to arbitrate her injunctive relief claims. II DISCUSSION A. Standard ofReview *“There is no uniform standard of review for evaluating an order denying a motion to compel arbitration. [Citation.] If the court’s order is based on a decision of fact, then we adopt a substantial evidence standard. [Citations.] Alternatively, if the court’s denial rests solely on a decision of law, then ade novo standard of reviewis employed. [Citations.]” [Citation.]’ [Citation.]” (Network Capital Funding Corp. v. Papke (2014) 230 Cal.App.4th 503, 508-509.) Here,the trial court denied Citibank’s petition to compelarbitration of McGill’s injunctiverelief claims because the FAA did not preempt the Broughton-Cruz rule, which rendered those claimsinarbitrable. We review these legal questions de novo. B. Governing FAA Preemption Principles The FAA “wasdesigned ‘to overrule the judiciary’s longstanding refusalto enforce agreementsto arbitrate’ [citation], and place such agreements “upon the same footing as other contracts”’ {citations].” (Volt Info. Sciences v. Leland Stanford Jr. U. (1989) 489 U.S. 468, 474 (Volt).) Toward that end, the FAA declaresthat a written agreementto arbitrate in any contract involving interstate commerce or a maritime transaction “shall be valid, irrevocable, and enforceable, save upon such groundsasexist at law orin equity for the revocation of any contract.” (9 U.S.C. § 2.) “Section 2 [of the FAA] 1s a congressional declaration of a liberal federal policy favoring arbitration agreements, notwithstanding any state substantive or proceduralpolicies to the contrary. The effect of the section is to create a body offederal substantive law of arbitrability, applicable to any arbitration agreement within the coverage of the Act.” [Citation.] ... [T]his body of substantive law is enforceable in both state and federal courts . . . [and] ‘withdr[a]w[s] the powerof the states to require a 6 Judicial forum forthe resolution of claims which the contracting parties agreed to resolve by arbitration.’ [Citation.]” (Perry v. Thomas (1987) 482 U.S. 483, 489 (Perry); see American Express Co. v. Italian Colors Restaurant (2013) 570 U.S. __, —__ [133 S.Ct. 2304, 2309] (Italian Colors) [“consistent with [section 2 of the FAA], courts must ‘rigorously enforce’ arbitration agreements according to their terms”].) “The FAA contains no express pre-emptive provision, nor does it reflect a congressional intent to occupythe entire field of arbitration. [Citation.] But even when Congresshas not completely displaced state regulation in an area, state law may nonetheless be pre-emptedto the extentthatit actually conflicts with federal law — that is, to the extentthat it ‘stands as an obstacle to the accomplishmentandexecution ofthe full purposes and objectives of Congress.’ [Citation.]”! (Volt, supra, 489 U.S.at p. 477.) “The ‘principal purpose’ of the FAAis to ‘ensur[e] that private arbitration agreements are enforced accordingto their terms.’ [Citations.]” (AT&TMobility, supra, 131 S.Ct. at p. 1748; Volt, supra, 489 U.S. at p. 478 [FAA’s “passage ‘was motivated,first and foremost, by a congressional desire to enforce agreements into which parties had entered’”’].) 1 The California Supreme Court recognizes “‘fourspecies of federal preemption: express, conflict, obstacle, and field.’ [Citation.] ‘First, express preemption arises when Congress “define[s] explicitly the extent to which its enactments pre-empt state law. [Citation.] ....” [Citations.] Second, conflict preemption will be found when simultaneous compliance with both state and federal directivesis impossible. [Citations.] Third, obstacle preemption arises when “‘under the circumstances of [a] particular case, [the challengedstate law] standsas an obstacle to the accomplishmentand execution of the full purposes and objectives of Congress.”” [Citations.] Finally, field preemption, i.e., “Congress” intent to pre-emptall state law in a particulararea,” applies “where the schemeoffederal regulation is sufficiently comprehensive to make reasonable the inference that Congress‘left no room’ for supplementary state regulation.” [Citation.]’ [Citations.]” (Parks v. MBNA America Bank, N.A. (2012) 54 Cal.4th 376, 383.) As stated above,this case presents an obstacle preemption issue. The FAA’s displacement ofstate laws that interfere with its purpose “is ‘now well-established,’ [citation], and has been repeatedly reaffirmed[citations].” (Preston v. Ferrer (2008) 552 U.S. 346, 353 (Preston).) Indeed, the FAA preempts state statutes that expressly invalidate arbitration agreements(see, e.g., Perry, supra, 482 U.S. at pp. 484, 490 [FAA preempts California Labor Codeprovision requiring judicial resolution of certain wage claims despite arbitration agreement]), state statutes that do not expressly invalidate arbitration agreements but have been judicially interpreted to do so (see, e.g., Southland Corp.v. Keating (1984) 465 U.S. 1, 10 [FAA preemptsstate statute interpreted by California Supreme Court to require judicial resolution of claims brought underthe California Franchise Investment Law]), and any other “state-law rules that stand as an obstacle to the accomplishment of the FAA’s objective[]”of enforcing arbitration agreements accordingto their specific terms (AT&TMobility, supra, 131 S.Ct. at p. 1748). The purpose underlying a state statute orruleis irrelevant. According to AT&TMobility, if the state law interferes with the FAA’s purpose ofenforcing arbitration agreements accordingto their terms, the state law is preempted no matter how laudable its objective. (AT&TMobility, supra, 131 S.Ct. at p. 1753; Iskanian, supra, 59 Cal.4th at p. 384 ["a state law rule, howeverlaudable, maynot be enforcedifit is preempted by the FAA”].) For example, in AT&TMobility, the Supreme Court held the FAA preempted a state-law rule invalidating class-action waivers in certain consumeradhesion contracts that required consumersto arbitrate their claims on an individual basis. The California Supreme Court had created the “Discover Bank rule”because it found class-action waivers in adhesion contracts allowed companiesto effectively exonerate themselves from hiability for cheating large numbers of consumersout of moneyindividually too small for a consumerto bring an individual action. (AT&TMobility, at p. 1746.) In finding the FAA preempted the Discover Bank rule, the United States Supreme Court rejected the argument “class proceedings are necessary to prosecute 8 small-dollar claims that might otherwise slip through the legal system” by declaring “States cannot require a procedure that is inconsistent with the FAA,evenifit is desirablefor unrelated reasons.” (AT&TMobility, supra, 131 S.Ct. at p. 1753.) Simply stated, if a state law conflicts with the FAA, the supremacyclause in the United States Constitution (U.S. Const., art. VI, cl. 2) requires the state law to give way. (Nitro-Lift Technologies, LLC v. Howard (2012) ___ U.S.__, __ [133 S.Ct. 500, 504]; /talian Colors, supra, 133 S.Ct. at p. 2320 (dissenting opn., of Kagan, J.); Perry, supra, 482 U.S. at p. 491.) Based on AT&TMobility, the California Supreme Court has begun revisiting otherrulesit establishedin the arbitration context to protect consumers and employees from companies with superior bargaining power. For example, in Sonic-Calabasas A, Inc. v. Moreno (2013) 57 Cal.4th 1109 (Sonic IZ), the court reconsideredits earlier decision in Sonic-Calabasas A, Inc. v. Moreno (2011) 51 Cal.4th 659 (Sonic I), where it examined the enforceability of an employer’s arbitration agreement that required employees to waivethe right to participate in a nonbinding administrative hearing process the California Legislature created to protect employees and assist them in recovering unpaid wages. The Sonic J court established a categorical rule declaring it against public policy and unconscionable for an employerto requireits employees to waive the right to a so-called “Berman hearing.” The court, however, did not invalidate the entire arbitration agreement, but rather held the employer and employee mustfirst engage in the Bermanhearing process, and then arbitrate their dispute according to their arbitration agreementif they are not satisfied with the outcome. (Sonic IT, supra, 57 Cal.4th at p. 1124.) In Sonic I, the California Supreme Court overturned Sonic /’s categorical prohibition against Berman hearing waivers based on AT&TMobility’s “preceptthat ‘efficient streamlined procedures’ is a fundamental attribute of arbitration with which state law may notinterfere.” (Sonic I, supra, 57 Cal.4th at p. 1140.) The SonicI] court explained, “Because a Berman hearing causesarbitration to be substantially delayed, the unwaivability of such a hearing, even if desirable as a matter of contractual fairness or public policy, interferes with a fundamental attribute of arbitration—namely,its objective ““to achieve ‘streamlined proceedings and expeditiousresults,””’ . . . [and therefore the FAA preempts] Sonic I’s rule.”2 (Id. at p. 1141.) Similarly, in /skanian, the California Supreme Court recently revisitedits earlier decision in Gentry v. Superior Court (2007) 42 Cal.4th 443 (Gentry), where the court examined whethera class action waiver that required employeesto arbitrate overtime wage disputes on an individual basis was unenforceable as against public policy. (U/skanian, supra, 59 Cal.4th at pp. 359-360.) The Gentry court held,“If [the trial court] concludes. . . a class arbitration is likely to be a significantly more effective practical means of vindicating the rights of the affected employees than individual litigation or arbitration, and finds that the disallowanceofthe class action will likely lead to a less comprehensive enforcement of overtime laws for the employeesalleged to be affected by the employer’s violations, it must invalidate the class arbitration waiver to ensure that these employees can ‘vindicate [their] unwaivable rights in an arbitration forum.’ [Citation.]” (Gentry,at p. 463, italics added.) In /skanian, the California Supreme Court overturned Gentry because the FAA preempts Gentry’s rule against employmentclass action waivers. The /skanian court explained AT&TMobility rendered any state-law rule against class action waivers invalid, even if the waiverhas an undesirable exculpatory effect, because requiring the parties to an arbitration agreement to engagein classarbitrationorlitigation when they 2 The Sonic I court held the arbitration agreement with the Berman hearing waiverstill could be unenforceable if the agreement was unreasonably one-sided and unconscionable for reasonsthat did not single out arbitration. The court remanded the case to the trial court to determine whether the agreement was unconscionable based on rules equally applicableto all contracts, not just arbitration agreements. (Sonic I/, supra, 57 Cal.4th at pp. 1124-1125.) 10 agreed to bilateral arbitration interferes with the fundamentalattributes ofarbitration as a streamlined, efficient, and less expensive dispute resolution mechanism,and thereby interferes with the FAA’s primary purpose ofenforcing arbitration agreements according to their terms. (/skanian, supra, 59 Cal.4th at pp. 362-364.) C. . McGill’s UCL, FAL, and CLRA Injunctive ReliefClaims Are Arbitrable 1. The Broughton-Cruz Rule Thetrial court refused to require McGill to arbitrate her injunctiverelief claims under the UCL, FAL, and CLRA based on anotherarbitration rule the California Supreme Court created to protect consumers—the Broughton-Cruz rule. That rule categorically prohibits arbitration of certain injunctiverelief claims broughtfor the public’s benefit. Broughton involved an individualplaintiff's CLRA claims seeking damagesand injunctive relief based on a health insurer’s deceptive ‘business practices. (Broughton, supra, 21 Cal.4th at pp. 1072-1073.) The court held the plaintiff's CLRA claims for damages were subjectto the parties’ arbitration agreement because settled precedentestablished “statutory damagesclaimsare fully arbitrable.” (Jd. at p. 1084.) ““By agreeing to arbitrate a statutory claim, a party does not forgo the substantiverights afforded bythestatute; it only submits to their resolution in an arbitral, rather than a judicial, forum.’ [Citation.]’ (/bid.) The Broughton court, however, determined the plaintiff's CLRA claims for injunctive relief were not arbitrable because the California Legislature neverintended to allow arbitration of these claims. (/d. at pp. 1080-1082.) The Broughton court based its conclusion on an “‘inherent conflict’” between arbitration and the underlying purpose of the CLRA’s injunctive relief remedy. (Broughton, supra, 21 Cal.4th at p. 1082.) The court found this inherent conflict arose from two factors. First, injunctive relief under the CLRA was forthe benefit of the general public rather than the individual plaintiff who brought the action. The individual 1] plaintiff already had been deceived by the defendant’s deceptive businesspractices, and therefore an injunction preventing those practices in the future would benefit the general public, not the individual plaintiff. “Second, the judicial forum hassignificant institutional advantages overarbitration in administering a public injunctive remedy, which as a consequencewill likely lead to the diminution or frustration of the public benefit if the remedy is entrusted to arbitrators.” (Jbid.) In Broughton, the Supreme Court also concludedits interpretation of the CLRA did not contravene the FAA,and therefore the FAA did not preempt Broughton’s prohibition against arbitration of injunctive relief claims. (Broughton, supra, 21 Cal.4th at pp. 1082-1083.) In reaching this conclusion, the court relied on earlier United States Supreme Court cases holdingstatutory claims are subject to arbitration unless arbitration would prevent the effective vindication of the statutory rights at issue. Those cases explain statutory claim is not arbitrable whenthe text of the statute creating the claim, the statute’s legislative history, or an inherent conflict between arbitration and the statute’s purpose demonstrate Congress did not intend the claim to be arbitrated. (/d. at p. 1075.) The Broughton court acknowledged this exception to the generalrule of arbitrability only had been applied to federal statutory rights—notstate statutory rights— but nonetheless applied it to the CLRA’s injunctive relief provision because “it would be perverse to extend the [federal] policy [of enforcing arbitration agreements] so far as to preclude states from passinglegislation the purposes ofwhich make it incompatible with arbitration, or to compel states to permit the vitiation through arbitration of the substantive rights afforded by suchlegislation.” (/d. at p. 1083.) In Cruz, the California Supreme Court extended Broughton to injunctive relief claims under the UCL and FAL. (Cruz, supra, 30 Cal.4th at p. 307.) As with CLRAinjunctive relief claims, the court concluded UCL and FAL injunctiverelief claimsare not arbitrable because they are brought for the public’s benefit and the 12 California Legislature never intendedfor these claims to be arbitrated. (/d.at pp. 315-316.) 2. The FAA Preempts the Broughton-Cruz Rule Following AT&TMobility, several federal district courts concluded the FAA preempted the Broughton-Cruz rule based on AT&TMobility’s holding that displaced any state-law rule that interfered with arbitration, but at least two courts concludedthe rule was not preempted based on the public benefitrationale the California Supreme Court employed in establishing the Broughton-Cruz rule. (Compare Meyerv. T-Mobile USA, Inc. (N.D.Cal. 2011) 836 F.Supp.2d 994, 1005-1006 [FAA preempts Broughton-Cruz rule] and Kaltwasser v. AT&TMobility LLC (N.D.Cal. 2011) 812 F.Supp.2d 1042, 1050-1051 [same] with Ferguson v. Corinthian Colleges (C.D.Cal. 2011) 823 F.Supp.2d 1025, 1032-1036 [FAA does not preempt Broughton-Cruz rule] and Jn re DirecTVEarly Cancellation Fee Marketing and Sales Practices Litigation (C.D.Cal. 2011) 810 F.Supp.2d 1060, 1071-1073 [same].) The Ninth Circuit Court of Appeals resolved this conflict by declaring the Broughton-Cruz rule preempted and overturning the two lowercourt decisions reaching the opposition conclusion. (Ferguson v. Corinthian Colleges, Inc. (9th Cir. 2013) 733 F.3d 928, 934-937 (Ferguson), Lombardi v. DirecTV, Inc. (9th Cir. 2013) 546 Fed.Appx. 715, 716.) Only one reported California case has addressed whether the FAA preempts. the Broughton-Cruz rule. In Nelson v. Legacy Partners Residential, Inc. (2012) 207 Cal.App.4th 1115, the Court of Appeal concluded the FAA preemptstherule based on the samerationalerelied on by the federal courts. (/d. at p. 1136.) That conclusion, however, was arguably dicta and the Ne/son court relied on a Ninth Circuit decision that wasvacatedlater based on a rehearing en banc. (See Kilgore v. KeyBank, N.A. (9th Cir. 2012) 697 F.3d 1191, 1192.) Weconclude the Supreme Court’s directive in AT&TMobility requires us to find the FAA preempts the Broughton-Cruz rule. In AT&TMobility, the Supreme Court dramatically broadened the FAA’s preemptive scope. This in turn requires a reevaluation ofall state statutes and rules that allowed courts to deny enforcement of arbitration agreements. (See Phillips v. Sprint PCS (2012) 209 Cal.App.4th 758, 769 (Phillips).) As the Supreme Court explained, “When state law prohibits outright the arbitration of a particular type of claim, the analysis is straightforward: The conflicting rule is displaced by the FAA.” (AT&TMobility, supra, 131 S.Ct. at p. 1747.) “States cannotrequire a procedurethatis inconsistent with the FAA,evenifit is desirable for unrelated reasons.” (/d. at p. 1753.) The Broughton-Cruz rule is a state law that categorically prohibits arbitration of all injunctive relief claims under the UCL, FAL, and CLRA that are brought for the public’s benefit. The FAA therefore preempts the rule. Whatever views we mayhold regarding the relative wisdom of the Broughton-Cruz rule and AT&T Mobility, “weare all boundto follow the lawasit has been interpreted by ourhighest court.” (Phillips, supra, 209 Cal.App.4th at p. 769.) Indeed, in Sonic IJ and Iskanian,the California Supreme Court acknowledged state-law rules it announced to protect consumers and employees from arbitration agreements that may have an exculpatory effect cannot survive in the face of the FAA’s broad preemptive scope announced in AT&TMobility. (Iskanian, supra, 59 Cal.4th at p. 364; Sonic I, supra, 57 Cal.4th at p. 1141.) 3 Nelson relied on Kilgore v. KeyBank, N.A. (9th Cir. 2012) 673 F.3d 947. On rehearing in that case, the Ninth Circuit concluded the Broughton-Cruz rule did not apply because the claims atissue did not seek public injunctive relief. (Ki/gorev. KeyBank, N.A. (9th Cir. 2013) 718 F.3d 1052, 1060-1061.) 14 Moreover,the rationale the Broughton court adopted to support its conclusion the FAA did not preemptits rule declaring public injunctiverelief claims inarbitrable no longer withstands scrutiny. As explained above, Broughton concluded the FAAdid not preemptits rule based on earlier United States Supreme Court precedent holding statutory claims are not subject to arbitration if it would prevent the effective vindication of the underlying statutory right. (Broughton, supra, 21 Cal.4th at pp. 1082-1083.) Subsequent cases, however, refute Broughton’s conclusionthe effective vindication exception appliesto state statutory claims. For example,in concluding the FAA preempted the Broughton-Cruz rule, the Ferguson court explained the effective vindication exception is “reserved for claims brought underfederalstatutes.” (Ferguson, supra, 733 F.3d at p. 936; see Italian Colors, supra, 133 S.Ct. at p. 2320 (dissenting opn. of Kagan,J.) [“We have noearthly interest (quite the contrary) in vindicating[a state] law. Our effective-vindication rule comes into play only when the FAAisalleged to conflict with anotherfederal law”(original italics)].) The rationale for the effective vindication exception confirms the exception only applies to federal statutory claims, and therefore may not justify the state-law Broughton-Cruz rule. The effective vindication exception arises from the principle Congress may excludea federalstatutory claim from the FAA’s coverage becauseit enacted the statutes establishing both the FAA andthe federal statutory claim. Under this exception to the FAA’s broad scope, a federal statutory claim is not arbitrable when the text of the statute creating the claim, its legislative history, orits operation reveals a congressionalintent to exclude the statutory claim from arbitration. (See, e.g., Gilmerv. Interstate‘Johnson Lane Corp. (1991) 500 U.S. 20, 26 [“Although all statutory claims may not be appropriate forarbitration, “having madethe bargainto arbitrate, the party should be held to it unless Congress itself has evinced an intention to preclude a waiver ofjudicial remedies for the statutory rights at issue”); Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc. (1985) 473 U.S. 614, 628 [We must assumethat if Congress 15 intended the substantive protection afforded by a givenstatute to include protection against waiverofthe right to a judicial forum, that intention will be deducible from text or legislative history”].) Based on the United States Constitution’s supremacy clause only Congress may excludea statute from the FAA’s coverage;a state legislature lacks authority to do so. (U.S. Const., art. VI, cl. 2 [“the Lawsofthe United States . . . shall be the supreme Law of the Land”); see, e.g., Volt, supra, 489 U.S. at p. 477 [“to the extent[a state law] “stands as an obstacle to the accomplishmentand execution of the full purposes and 339objectives of Congress[, it is preempted]’”].) Accordingly, the California Legislature’s intent in enacting the UCL, FAL, and CLRA isirrelevant in determining whether the FAApreempts a state-law rule prohibiting arbitration of injunctive relief claims under those statutes. McGill nonetheless contends the United States Supreme Court applied the effective vindication exception to state statutory rights in Preston. She is mistaken. In Preston, the Supreme Court enforced the parties’ arbitration agreement and held the FAA preempteda state statute that otherwise required the parties to submit their dispute to the state labor commissionerfor resolution. (Preston, supra, 552 U.S.at pp. 349-350, 358-359.) The Preston court noted the parties’ arbitration agreement merely changed the forum in which their dispute would be resolved—anarbitral forum rather than an administrative one—but did notaffect the parties’ substantive state law rights. (Jd. at p. 359.) Contrary to McGill’s contention, the simple acknowledgmenttheparties did not relinquish any substantive state law rights is not an applicationof the effective vindication exception. McGill also cites two circuit court decisions that applied the effective vindication exception to severportions of arbitration agreementsthat required the parties to forego certain state statutory rights. (See Kristian v. Comcast Corp. (Ast Cir. 2006) 446 F.3d 25, 29, 64; Booker v. Robert HalfIntern., Inc. (D.C. Cir. 2005) 413 F.3d 77, 16 79.) Both of these cases, however, applied the exceptionto state statutory rights without considering whetherthe exception’s underlying rationale supported its application to state statutory rights. “An opinion is not authority for a point not raised, considered, or resolved therein” (Styne v. Stevens (2001) 26 Cal.4th 42, 57; Dameron Hospital Assn.v. AAA Northern California, Nevada & Utah Ins. Exchange (2014) 229 Cal.App.4th 549, 564), and “Weare not bound by decisions of lower federal courts onissues of federal law”(California Assn. for Health Services at Homev. State Dept. ofHealth Care Services (2012) 204 Cal._App.4th 676, 684; see Barrett v. Rosenthal (2006) 40 Cal.4th 33, 58). As explained above, we conclude the United States Constitution’s supremacy clause prevents courts from applying the effective vindication exception to state statutory rights, and therefore we decline to follow these circuit court decisions. 3. Iskanian DoesNot Reaffirm the Broughton-Cruz Rule or Otherwise SaveIt From FAA Preemption McGill contends the California Supreme Court’s Jskanian decision reaffirmed Broughton’s conclusion the FAA does not preempt the Broughton-Cruz rule and its prohibition against arbitrating UCL, FAL, and CLRA injunctiverelief claims. McGill misreads Iskanian. In [skanian, theCalifornia Supreme Court examined whether the FAA preemptsstate-law rules restricting the enforceability of arbitration agreementsthat include a waiverof an employee’s right to bring class or representative actions based on an employer’s failure to pay wages and provide meal andrest periods. (/skanian, supra, 59 Cal.4th at pp. 359-360.) As explained above, [skanian overturned Genitry’s state-law rule invalidating class action waivers that required employeesto pursue their Labor Code claims on an individual basis only. Even if an individual proceedingis an ineffective meansto prosecute wage and hourclaims, the /skanian court concluded the FAA preempts Geniry’s rule because it interferes with the FAA’s objective of enforcing arbitration agreements according to their terms. (/skanian, at pp. 363-364.) 17 The /skanian court, however, distinguished an employee’s class action to recover unpaid wages from an employee’s representative action to recovercivil penalties under the PAGA.In the former, an employee seeks to recover wages an employerfailed to pay the employeeandall other similarly situated employees,plusall statutory penalties the Labor Code awards to employees for their employer’s failure to pay all wages and provide all required breaks. (See, e.g., Lab. Code, § 1194, subd. (a) [“any employee receiving less than the legal minimum wageorthe legal overtime compensation applicable to the employeeis entitled to recover in a civil action the unpaid balance of the full amountof this minimum wageor overtime compensation,including interest thereon, reasonable attorney’s fees, and costs of suit”]; see also id. at § 203, subd. (a) [“If an employer willfully fails to pay . . . any wages of an employee whois discharged or who quits, the wages of the employeeshall continue asa penalty from the due date thereof at the samerate until paid oruntil an action therefor is commenced; but the wagesshall not continue for more than 30 days”].) In a representative action under the PAGA, however, an aggrieved employee may bring a civil action personally and on behalf of other current or former employeesto recovercivil penalties from the employer that only the state’s labor law enforcement agencies previously could recover. (Jskanian, supra, 59 Cal.4th at pp. 380-381; Lab. Code, § 2699, subd. (a) [“any provisionof this codethat provides for a civil penalty to be assessed andcollected by the Labor and Workforce Development Agency.. . for a violation of this code, may,as an alternative, be recovered through a civil action brought by an aggrieved employee on behalf of himself or herself and other current or former employees’’].) Asthe /skanian court explained, before the PAGA’s enactmentin 2004, several statutes imposed civil penalties on employers for certain Labor Code violations and also made someviolations criminal misdemeanors. The Labor Commissioner could bring an action to recoverthecivil penalties, with all funds collected going to the state’s 18 general fund or the Labor and Workforce Development Agency,andlocal district attorneys could prosecute criminalviolations. (/skanian, supra, 59 Cal.4th at p. 378.) These enforcement mechanismsproved ineffective, however. State labor enforcement agencies lacked the necessary resources to investigate employers who may have violated the Labor Code, and district attorneys rarely investigated and prosecuted misdemeanor LaborCode violations because they used their limited resources to focus on moreserious offenses. The California Legislature therefore enacted the PAGA “‘to allow aggrieved employees, acting as private attorneys general, to recovercivil penalties for Labor Code violations, with the understanding that labor law enforcement agencies wereto retain primacy overprivate enforcement efforts.’” (Iskanian, at p. 379, italics added.) Before an aggrieved employee mayfile a representative PAGAaction, he or she mustgive written notice of the alleged Labor Code violations to both the employer and the Labor and Workforce Development Agency. The employee maynotfile the action unless the agency declines to investigate, declines to issue a citation after investigating,orfails to initiate and completeits investigation within the time periods the Labor Codespecifies. (Lab. Code, § 2699.3; Iskanian, supra, 59 Cal.4th at p. 380.) The employee brings the action as a “‘proxy or agent ofthe state’s labor enforcement agencies,’” and those agencies are “always the real part[ies] in interest in the suit.” (Iskanian, at pp. 380, 382.) “‘In a lawsuit brought under the [PAGA], the employee plaintiff represents the same legal right and interest as state labor law enforcement agencies—namely, recovery of civil penalties that otherwise would have been assessed and collected by the Labor and Workforce Development Agency.” (/d. at p. 380.) ““Because an aggrieved employee’s action under the [PAGA]functions as a substitute for an action brought by the governmentitself, a judgment in that action binds all those, including nonparty aggrieved employees, who would be bound by a judgment in an action brought by the government.’” (/skanian, supra, 59 Cal.4th at p. 381.) “The civil penalties recovered on behalf of the state under the PAGA aredistinct from the 19 statutory damages to which employees maybeentitled in their individual capacities.”4 (Ibid.) Seventy-five percentof the civil penalties recovered in a representative PAGA action go to the Labor and Workforce Development Agency, with the remainderpaid to the aggrieved employeesas an incentive to bring the action. (/d. at p. 380.) The /skanian court held these characteristics make an employee’s waiver of the right to bring a representative PAGA action unenforceableas againstpublic policy because a predispute waiverof that right would allow an employer to exculpateitself for its own wrongdoing in violation of Civil Code section 1668, and also would allow a private agreementto contravene a law established for a public purpose in violation of Civil Codesection 3513.5 (Uskanian, supra, 59 Cal.4th at pp. 382-383.) Unlike Gentry’s 4 “Case law hasclarified the distinction ‘between a requestfor statutory penalties provided by the Labor Code for employer wage-and-hourviolations, which were recoverable directly by employees well before the [PAGA] becamepart of the Labor Code, and a demandfor“civil penalties,” previously enforceable only by the state’s labor law enforcement agencies. An exampleof the formeris [Labor Code] section 203, which obligates an employerthat willfully fails to pay wages due an employee whois discharged orquits to pay the employee, in addition to the unpaid wages, a penalty equal to the employee’s daily wages for each day, not exceeding 30 days, that the wages are unpaid. [Citation.] Examples ofthe latter are [Labor Code] section 225.5, which provides, in addition to any otherpenalty that may be assessed, an employerthat unlawfully withholds wages in violation of certain specified provisions of the Labor Codeis subject to a civil penalty in an enforcementactioninitiated by the Labor Commissionerin the sum of $100 per employeefortheinitial violation and $200 per employee for subsequentor willful violations, and [Labor Code] section 256, which authorizes the Labor Commissionerto “imposea civil penalty in an amountnot exceeding 30 days [sic] pay as waiting time underthe terms of [Labor Code] Section 203.” [Citations.]” (/skanian, supra, 59 Cal.4th at p. 381.) 5 Civil Code section 1668 provides, “All contracts which havefortheir object, directly orindirectly, to exempt anyone from responsibility for his own fraud, or willful injury to the person orproperty of another, or violation of law, whether willful or negligent, are against the policy of the law.” Civil Code section 3513 provides, “Any one may waive the advantage of a law intendedsolely for his benefit. But a law established for a public reason cannot be contravened bya private agreement.” 20 rule against waiver of an employee’s right to bring a class action for unpaid wages, the Iskanian court held the FAA did not preemptits rule against waiver of an employee’s right to bring a representative PAGAaction to recovercivil penalties because the latter rule “doesnotfrustrate the FAA’s objectives.” (Jskanian,at p. 384.) Based on its review of the FAA’s legislative history and the United States Supreme Court precedent interpreting the FAA, the Jskanian court concluded the FAA “aimsto ensure an efficient forum for the resolution ofprivate disputes”by requiring the parties to an arbitration agreementto arbitrate their disputes in the manner to which they agreed. (/skanian, supra, 59 CalAth at p. 384,originalitalics.) “Thereis no indication[, however,] that the FAA wasintended to govern disputes between the governmentinits law enforcement capacity andprivate individuals.” (Iskanian, at p. 385.) | “Simply put, a PAGA claim liesoutside the FAA’s coverage becauseit is not a dispute between an employerand an employeearising out of their contractual relationship. It is a dispute between an employerand the state, whichalleges directly or through its agents—eitherthe [Labor and Workforce Development] Agency or aggrieved employees—that the employerhas violated the Labor Code. ... [J] ... Nothing in the text orlegislative history of the FAA norin the Supreme Court’s construction ofthe statute suggests that the FAA wasintendedto limit the ability of states to enhancetheir public enforcementcapabilities by enlisting willing employeesin qui tam actions. Representative actions under the PAGA,unlikeclass action suits for damages, do not displace the bilateral arbitration of private disputes between employers and employees overtheir respective rights and obligations toward eachother. Instead, they directly enforce the state's interest in penalizing and deterring employers whoviolate California’s labor laws.” (/skanian, supra, 59 Cal.4th at pp. 386-387, originalitalics.) Contrary to McGill’s contention, /skanian did not “reaffirm” Broughton-Cruz’s prohibition against arbitrating public injunctive relief claims or the rationale the Broughton court adopted to support its conclusion the FAA did not preempt 21 that rule. Indeed, /skanian does not even mention Broughton or Cruz. As explained above, Broughion foundthe right to seek public injunctiverelief could not be vindicated effectively through arbitration and the California Legislature never intended to allow arbitration of these claims. Not only is Broughton’srationale no longerviable forthe reasons discussed above, /skanian relies on a different rationale to support its conclusion the FAA does not preemptits rule prohibiting PAGArepresentative action waivers. Iskanian concludes a PAGAaction poses no obstacle to FAA purposes because the FAA only applies to private agreements betweenparties to arbitrate their disputes. A PAGA representativeaction is not subject to a private arbitration agreement between an employer and employee becausethe action is a dispute between thestate and an employer to recovercivil penalties for Labor Code violations. An aggrieved employee simply brings the action as a “‘proxy or agent of the state’s labor law enforcement agencies”; the state at all times remains the real party in interest and the lion’s share ofthe recovery goesto the state. (/skanian, supra, 59 Cal.4th at pp. 380, 382, 387-388.) Moreover, the Jskanian court emphasized, “Our FAA holdingapplies specifically to a state law rule barring predispute waiver of an employee’sright to bring an action that can only be broughtbythe state orits representatives, where any resulting judgmentis binding on the state and any monetary penalties largely go to state coffers.” (skanian, supra, 59 Cal.4th at p. 388.) The PAGA is unique in comparison to the UCL, FAL, and CLRA becausethe state retains “primacy overprivate enforcementefforts.” (Iskanian, at p.379.) An employee maynotfile a PAGA action unless and until he or she gives the state notice of the specific Labor Code violations on which the action will be based, andthe state declinesto investigate, declines to issue a citation after investigating,orfails to take action within certain statutory time periods. A plaintiff seeking injunctive relief under the UCL, FAL, or CLRA, however, is not required to give advance notice to the state and await state action (or inaction) beforefiling a lawsuit. McGill cites no authority, and we have found none, that 22 designates the state as the real party in interest on an injunctiverelief claim under the UCL, FAL, or CLRA. Similarly, McGill cites no authority that binds the state to any judgmenton citizen’s injunctive relief claims under the UCL, FAL, or CLRA. Althougha plaintiff in both a PAGArepresentative action and an action seeking injunctive relief under the UCL, FAL, and CLRA generally acts as a private attorney general, the PAGA representative action is fundamentally different than the injunctive relief action underthe other statutes. Accordingly, nothing in Iskanian’s analysis of PAGArepresentative action waivers prevents the conclusion the FAA preempts the Broughton-Cruz rule. I DISPOSITION The order is reversed and the matter remandedforthetrial court to orderall claimsto arbitration. Citibank shall recoverits costs on appeal. ARONSON,J. WE CONCUR: RYLAARSDAM,ACTINGP.J. THOMPSON,J. 10 1] 12 13 14 15 16 17 18 19 20 21 22 24 25 26 27 28 PROOF OF SERVICE STATE OF CALIFORNIA, COUNTY OF LOS ANGELES Iam employed in the State of California, County of Los Angeles. I am overthe age of 18 and nota party to the within suit; my business address is 1840 Century Park East, Suite 450, Los Angeles, California 90067. On January 27, 2015, I served the documentdescribed as: PETITION FOR REVIEW on the interested parties in this action by sendingon theinterested parties in this action by sending [ ] the original [or] [W] a true copythereof [”] to interested parties as follows [or] as stated on the attached servicelist: See attached servicelist [X] BY MAIL (ENCLOSED IN A SEALED ENVELOPE):I deposited the envelope(s) for mailing in the ordinary course of business at Los Angeles, California. I am “readily familiar” with this firm’s practice of collection and processing correspondence for mailing. Under that practice, sealed envelopes are deposited with the U.S. Postal Service that samedayin the ordinary course ofbusiness with postage thereon fully prepaid at Los Angeles. California. . [X] BY E-SUBMISSION:I herebycertify that an electronic copy ofthis document was - served from Los Angeles, California, by delivery on the parties listed herein through submission of the electronic copvvia the interested parties listed website. [ ] BY FAX: hereby certify that this document was served from Los Angeles, California, by facsimile delivery on the parties listed herein at their most recent fax number of record in this action. [ } BY PERSONAL SERVICE:I personally delivered the document, enclosed in a sealed envelope. by handto the offices ofthe addressee(s) named herein. [X] BY OVERNIGHT DELIVERY: I am “readily familiar” with this firm’s practice of collection and processing correspondence for overnight delivery. Under that practice, overnight packages are enclosed in a sealed envelope with a packingslip attached thereto fully prepaid. The packagesare picked upby thecarrier at our offices or delivered bv ouroffice to a designated collectionsite. I declare under penalty of perjury underthe laws of the State of California that the foregoing 1s true and correct. Executed this January 27, 2015, at Los Angeles, California. Matthew Krout Walaa Type or Print Name , / Signature Page | PROOFOF SERVICE 10 1] 12 13 14 15 16 17 18 19 20 2] 22 24 25 26 27 28 SERVICE LIST Julia B. Strickland Marcos D. Sasso STROOCK & STROOCK & LAVAN 2029 Century Park East, #1800 Los Angeles, CA 90067 Telephone: (310) 556-5800 Facsimile: (310) 556-5959 Email: Jstrickland@stroock.com Msasso@stroock.com via overnight delivery Attorneys for Citibank, N.A.: Defendant and Appellant Appellate Coordinator Office ofthe Attorney General Consumer Law Section 300 South Spring Street Los Angeles, CA 90013 via e-submission Attps:oag. ca,gowservices-info/l 7209- briefiadd Office of the Attorney General Per Cal. Rules of Court 8.29, Business & Professions Code § 17209 Honorable John W.Vineyard Department 12 c/o Clerk of the Court Riverside Superior Court Civil Department 4050 Main Street Riverside, CA 92501 via U.S. mail Trial Court Pursuant to CRC 8.212 (c) The Honorable Richard M Aronson The Honorable William F. Rylaarsdam The Honorable David F. Thompson c/o Clerk ofthe Court California Court of Appeal 4th Appellate District Division 3 601 W. Santa Ana Blvd. Santa Ana, California 9270] via U.S. mail Court of Appeals Office of the District Attorney County of Riverside Appellate Division 3960 Orange Street Riverside, CA 92501 (951) 955-5400 via U.S. mail Office of the District Attorney Per Cal. Rules of Court 8.29; Business & Professions Code § 17209 California Supreme Court Clerk of the Court 350 McAllister Street San Francisco, CA 94102 via overnight delivery & via e-submission Attp./www.courts.ca.gow 9280.htm Supreme Court of CaliforniaPursuant to CRC 8.25 (b)(3)(B)Pursuant to CRC 8.212 (c) Page 2 PROOF OFSERVICE