MCARDLE v. AT MOBILITY LLC PCS LLC (2019)

MEMORANDUM *

AT&T Mobility LLC (“AT&T”) appeals the district court's order rescinding its earlier order to compel arbitration and vacating the arbitration award. We have jurisdiction under 9 U.S.C. § 16(a)(1), and we affirm.

For the reasons set forth in our concurrently filed opinion in Blair v. Rent-A-Center, Inc., No. 17-17221, we hold that California's McGill rule is not preempted by the Federal Arbitration Act.

In light of this holding, we hold that the arbitration agreement between AT&T and plaintiff Steven McArdle is null and void in its entirety. Subsection 2.2(6) of the parties’ agreement purports to waive McArdle's right to pursue public injunctive relief in any forum and so is unenforceable under California law. See McGill v. Citibank N.A., 2 Cal.5th 945, 216 Cal.Rptr.3d 627, 393 P.3d 85, 94 (2017). Subsection 2.2(6) of the agreement continues: “If this specific provision is found to be unenforceable, then the entirety of this arbitration provision shall be null and void.”

The text's non-severability clause plainly invalidates the entire arbitration agreement. Contrary to AT&T's assertions, there are no “ambiguities about the scope of [the] arbitration agreement.” See Lamps Plus, Inc. v. Varela, ––– U.S. ––––, 139 S. Ct. 1407, 1418, 203 L.Ed.2d 636 (2019) (citing Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24–25, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983)); see also E.E.O.C v. Waffle House, Inc., 534 U.S. 279, 294, 122 S.Ct. 754, 151 L.Ed.2d 755 (2002) (“[W]e do not override the clear intent of the parties, or reach a result inconsistent with the plain text of the contract, simply because the policy favoring arbitration is implicated.”).

AT&T's proposed two-step process derived from our opinion in Ferguson v. Corinthian Colleges, Inc., 733 F.3d 928 (9th Cir. 2013) is impermissible where the arbitration agreement is null and void in its entirety. Under these circumstances, the district court did not err in vacating the arbitration award and rescinding its prior order compelling arbitration.

AFFIRMED.