The Ninth Circuit Court of Appeals will defer ruling on a California arbitration case, Chamber of Commerce v. Bonta, because the U.S. Supreme Court is now reviewing another California case, Viking v. Moriana, addressing how arbitration falls under the Federal Arbitration Act.
“On December 15, 2021, the Supreme Court granted the petition for a writ of certiorari in Viking River Cruises, Inc. v. Moriana, 142 S. Ct. 734 (2021) (mem.). A majority of the panel agrees that consideration of appellees’ petition for rehearing en banc shall be deferred until Viking River Cruises, Inc. v. Moriana is decided,” the Ninth Circuit’s Feb. 14 order states.
As a general matter, it isn’t often one sees courts stop proceedings to see what happens in another court, Thomas Lenz, a lecturer at USC Gould School of Law, told the Northern California Record.
“But I think when the Supreme Court decides to take an issue, in an abundance of caution, a lower court may feel that there could be some impact,” Lenz said. “And it could be viewed as really an act of prudence to see what the Supreme Court does.”
The Federal Arbitration Act has long been challenged by the plaintiff bar, and the high court’s decision will impact application of arbitration law in California and every other state.
Lenz noted the arbitration questions in the respective cases differ, with Viking v. Moriana a PAGA (CA Private Attorneys General Act) waiver and Chamber v. Bonta addressing the impact of AB 51, a 2019 California law which claims to limit or bar arbitration.
“I suspect the Ninth Circuit wants to see what analysis the Supreme Court applies, particularly given that the Federal Arbitration Act is important to both cases,” Lenz said.
Ultimately the SCOTUS will weigh to 0what degree California’s PAGA law may impair the federal arbitration statute, after which that ruling will be considered by the Ninth Circuit in Chamber v. Bonta.
The Ninth Circuit’s 2-1 decision in that case last September partially overturned a district court opinion preventing enforcement of AB 51. The Chamber on Oct. 20 filed a petition for en banc review with the Ninth Circuit. With the en banc petition pending, the district court’s original decision that enjoins enforcement of AB 51 remains in effect.
AB 51 as written bans required arbitration in matters involving California’s Labor Code and Fair Housing and Employment Act (FEHA).
“Most arbitration agreements are going to be covered by the Federal Arbitration Act,” said Lenz, who is also a partner handling labor and employment law at Atkinson, Andelson, Loya, Ruud & Romo. “So even a purported carveout in AB 51 – query whether it is a meaningful carveout. It is a law that’s going to really affect a significant number of claims which are typically raised under the Fair Employment and Housing Act and the Labor Code in the employment context in California.”
Oral arguments in Viking v. Moriana are scheduled to take place later this month, with a ruling possible by early this summer.
(Editor's note: The Northern California Record is owned by the U.S. Chamber Institute for Legal Reform).