California Supreme Court Grants Review of Capstone Law’s Case McGill v. Citibank

LOS ANGELES–(BUSINESS WIRE)–On April 1, 2015, the California Supreme Court granted review of
Capstone Law, APC’s consumer class action case McGill v. Citibank
(No. S224086), which is potentially a promising development for
California consumers as well as class action practitioners. Capstone
Law, APC is a Los Angeles-based class action firm responsible for some
of the most significant developments in class action and employment law
in recent years. The California Supreme Court review of McGill will
decide the issue of whether claims for public injunctive relief under
California’s Unfair Competition Law (UCL), False Advertising Law (FAL),
and the Consumer Legal Remedies Act (CLRA) can be waived or forced into
arbitration.

In McGill, the plaintiff sued defendant Citibank, N.A. for unfair
competition and false advertising arising from defendant’s offering of a
credit insurance plan she purchased to protect her credit card account.
Citibank moved to compel McGill to arbitrate her claims based on an
arbitration provision in her account agreement. The trial court granted
Citibank’s motion as to McGill’s claims for monetary damages but denied
it as to her claims for public injunctive relief. In doing so, the court
relied on the “Broughton-Cruz rule” established by the California
Supreme Court in Broughton v. Cigna Healthplans (1999) 21 Cal.4th
1066 and Cruz v. PacifiCare Health Systems, Inc. (2003) 30
Cal.4th 303. Under the Broughton-Cruz rule, arbitration
provisions are unenforceable as against public policy if they require
arbitration of UCL, FAL, or CLRA injunctive relief claims brought for
the public’s benefit. The Broughton-Cruz rule thus exempts public
injunction remedy from arbitration even when the remaining claims are
arbitrated.

While the trial court in McGill relied on the Broughton-Cruz rule
in partially denying Citibank’s Motion to Compel Arbitration, the
California Court of Appeal (Fourth Appellate District), citing AT&T
Mobility LLC v. Concepcion
(US Supreme Court), reversed the trial
court’s order, finding that the Broughton-Cruz rule is preempted
by the Federal Arbitration Act (FAA), and holding that all of the
plaintiff’s claims should have been sent to arbitration. McGill
v. Citibank, N.A.
, 232 Cal.App.4th 753 (2014), review
granted
. By granting the Petition for Review Capstone filed in
January 2015, the California Supreme Court will decide for itself
whether the Broughton-Cruz rule survives Concepcion.

Capstone Partner Glenn Danas remarked: “We are very pleased that the
California Supreme Court has elected to weigh in on this critically
important issue. A vital tool for combating subtle but pervasive
consumer fraud is through the issuance and implementation of public
injunctions by California courts. If massive companies like Citibank are
free essentially to wipe out consumers’ ability to seek public
injunctive relief using arbitration agreements, the playing field will
be shifted dramatically against consumers and fraudulent practices
committed by large corporations will escalate unchecked. We’re hopeful
that the California Supreme Court will apply the same careful analysis
to this issue as it has in other recent arbitration cases.”

The outcome of the McGill decision will likely determine whether
critically important public injunctive relief will remain an available
remedy in future consumer class actions in California. California
consumers, Capstone Law, and class action attorneys throughout
California are hopeful that the California Supreme Court will reach a
similarly positive result for the plaintiff in McGill v.
Citibank
as it did in Iskanian v. CLS, another seminal case
litigated by Capstone.

Capstone
Law, APC
 is a California-based plaintiffs’ side class action law
firm representing employees and consumers across the country in
litigation involving labor and workplace rights, privacy laws,
automobile and other product defects, consumer protection, false
advertising or other deceptive trade practices, and financial fraud.

If you wish to discuss this or any other matter with us, please contact
the following attorney: Stephen Gamber, Esq., Capstone Law, APC, 1840
Century Park East, Suite 450, Los Angeles, CA 90067; Phone number:
310-556-4811, Email: Stephen.gamber@capstonelawyers.com.

Visit the Capstone
Law, APC website
 for more information about the firm, or visit our
blog, the Impact
Litigation Journal
.

Contacts

Capstone Law, APC
Stephen Gamber, Esq.
310-556-4811
Stephen.gamber@capstonelawyers.com

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