The Federal Arbitration Act (“FAA”) preempts California’s Broughton-Cruz rule, which states arbitration agreements for injunctive relief claims under the state unfair competition and false advertising laws are against public policy and invalid, the California Court of Appeal has held in an insurance consumer class action, allowing arbitration to proceed. McGill v. Citibank, N.A., No. G049838 (Cal. Ct. App. Dec. 18, 2014).

This decision calls into question the continued viability of California’s Broughton-Cruz rule, which was established by the California Supreme Court in Broughton v. Cigna Healthplans, 21 Cal. 4th 1066 (Cal. 1999), and Cruz v. PacifiCare Health Systems, Inc., 30 Cal. 4th 303 (Cal. 2003).
Continue Reading Federal Arbitration Act Preempts State Arbitration Rule, California Court of Appeal Holds

In a case alleging misclassification of an independent contractor in the transportation industry, the California Supreme Court has found that the California unfair competition law (Bus. & Prof. Code, § 17200 et seq.) (“UCL”) was not preempted by the Federal Aviation Administration Authorization Act of 1994 (Pub. L. No. 103-305 (Aug. 23, 1994) 108 Stat.