Supreme Court of California Justia
Docket No. S220812

Sandquist v. Lebo Automotive, Inc.

Filed 7/28/16
IN THE SUPREME COURT OF CALIFORNIA
TIMOTHY SANDQUIST,
Plaintiff and Appellant,
S220812
v.
Ct.App. 2/7 B244412
LEBO AUTOMOTIVE, INC., et al.,
Los Angeles County
Defendants and Respondents.
Super. Ct. No. BC476523


Plaintiff Timothy Sandquist and the various defendants here are parties to
an arbitration agreement. A salient question is whether that agreement permits or
prohibits arbitration on a classwide basis. Here we must answer a question one
step removed—who decides whether the agreement permits or prohibits classwide
arbitration, a court or the arbitrator? The question has divided the many state and
federal courts to consider it.
We conclude no universal rule allocates this decision in all cases to either
arbitrators or courts. Rather, who decides is in the first instance a matter of
agreement, with the parties‘ agreement subject to interpretation under state
contract law. Under state law, these parties‘ arbitration agreement allocates the
decision to the arbitrator. Under federal arbitration law, no contrary presumption
requires a different result, so the issue remains one for the arbitrator. Because the
Court of Appeal arrived at a similar answer, we affirm.
SEE DISSENTING OPINION
FACTUAL AND PROCEDURAL BACKGROUND
The material facts are not in dispute. In 2000, plaintiff Timothy Sandquist
was hired by defendants (collectively, Lebo or Lebo Automotive) to work as a
salesperson at an automotive dealership.1 On Sandquist‘s first day, his manager
gave him approximately 100 pages of preprinted forms with instructions to fill out
and sign each document as quickly as possible so that Sandquist could begin work.
The documents were not discussed with Sandquist, but he was required to sign
them as a condition of employment. Included among the documents were three
different form arbitration agreements. Under time pressure, Sandquist finished the
paperwork as quickly as possible, without reviewing each document, and did not
realize he was signing multiple arbitration agreements.
In 2012, Sandquist, who is African-American, sued Lebo Automotive. The
operative complaint alleges Sandquist and other non-Caucasian employees were
subjected to racial discrimination, harassment, and retaliation. The complaint
seeks to bring claims on behalf of ―a class of current and former employees of
color.‖ It includes an individual claim for constructive discharge and class claims
for discrimination and creation of a hostile work environment under the Fair
Employment and Housing Act (Gov. Code, § 12940 et seq.) and unfair
competition law (Bus. & Prof. Code, § 17200 et seq.). The complaint seeks
injunctive and declaratory relief and damages.
Lebo Automotive moved to compel individual arbitration based on the
arbitration agreements signed by Sandquist on his first day of work. (See Code
Civ. Proc., § 1281.2.) Finding the agreements enforceable and not unconscionable
1
Defendants include the dealership, Lebo Automotive, Inc., doing business
as John Elway‘s Manhattan Beach Toyota, and its then current owners and
operators, John Elway, Mitchell D. Pierce, Jerry L. Williams, and Darrell Sperber.
2
and the instant dispute within their scope, the trial court granted the motion. The
court also interpreted Stolt-Nielsen S. A. v. AnimalFeeds Int’l Corp. (2010) 559
U.S. 662 and Kinecta Alternative Financial Solutions, Inc. v. Superior Court
(2012) 205 Cal.App.4th 506 as requiring the court to decide whether class
arbitration was available. Because in the trial court‘s view the agreements did not
permit class arbitration, it struck the class allegations under Code of Civil
Procedure section 436. Although the trial court granted Sandquist leave to amend
and time to find a substitute class representative, when he advised the court every
employee at the dealership was subject to the same arbitration agreements, it
dismissed the class claims with prejudice.
On appeal, the Court of Appeal reversed in part. It declined to address
Sandquist‘s claim that the arbitration agreements were unconscionable because
that ruling was not appealable (State Farm Fire & Casualty v. Hardin (1989) 211
Cal.App.3d 501, 505–506), but it considered his challenge to the dismissal of class
allegations under the death knell doctrine (see In re Baycol Cases I & II (2011) 51
Cal.4th 751, 762). Disagreeing with the trial court‘s conclusion that existing
precedent compelled the court to determine whether class arbitration was
available, the Court of Appeal found the issue an open and unsettled one. It
examined cases on each side of the existing divide and concluded the availability
of class proceedings under an arbitration agreement is a question of contract
interpretation for the arbitrator to decide in the first instance.
Lebo Automotive petitioned for review, contending the Court of Appeal‘s
decision contributed to an existing state and federal split over who should decide
whether an arbitration agreement permits class arbitration. We granted review.
3
DISCUSSION
I.
State Law and the Parties’ Arbitration Clauses
A.
What the Arbitrator May Decide Is Initially a Matter of
Agreement Under State Law
The issue before us is not whether class arbitration is permissible here, but
a matter antecedent to that issue: who should decide whether it is permissible, a
court or an arbitrator. No universal one-size-fits-all rule allocates that question to
one decision maker or the other in every case. Rather, ―who decides‖ is a matter
of party agreement. As the United States Supreme Court has explained in a
closely related context, ―[j]ust as the arbitrability of the merits of a dispute
depends upon whether the parties agreed to arbitrate that dispute [citations], so the
question ‗who has the primary power to decide arbitrability‘ turns upon what the
parties agreed about that matter.‖ (First Options of Chicago, Inc. v. Kaplan
(1995) 514 U.S. 938, 943.) And just as whether class arbitration is available
depends on whether the parties agreed to allow or forbid it (Stolt-Nielsen S. A. v.
AnimalFeeds Int’l Corp., supra, 559 U.S. at pp. 684–687), so the question who has
the power to decide the availability of class arbitration turns upon what the parties
agreed about the allocation of that power.
The United States Supreme Court‘s treatment of the issue confirms the
parties‘ agreement as the mandatory starting point. In Green Tree Financial Corp.
v. Bazzle (2003) 539 U.S. 444 (Green Tree), the plurality and the principal dissent,
although disagreeing about the ultimate ―who decides‖ question, both agreed
about where the analysis should begin. (See id. at p. 451 (plur. opn. of Breyer, J.
[concluding the question should be for the arbitrator because ―[u]nder the terms of
the parties‘ contracts, the question—whether the agreement forbids class
arbitration—is for the arbitrator to decide‖]; id. at p. 456 (dis. opn. of Rehnquist,
C. J.) [agreeing that ―the decision of what to submit to the arbitrator is a matter of
4
contractual agreement by the parties‖].) Similarly, in Stolt-Nielsen S. A. v.
AnimalFeeds Int’l Corp., supra, 559 U.S. at page 680 and Oxford Health Plans
LLC v. Sutter (2013) 569 U.S. ___, ___, fn. 2 [186 L.Ed.2d 113, 119, fn. 2, 133
S.Ct. 2064, 2068, fn. 2], the Supreme Court accepted—because the parties had so
agreed—that an arbitrator should decide in the first instance whether class
arbitration was available.
Consequently, we must examine the parties‘ agreements to determine what
they say concerning the ―who decides‖ question. But under what body of law?
Sandquist argues federal law governs exclusively, while Lebo Automotive urges
state law does. We agree with Lebo: this examination must be conducted, at least
initially, through the prism of state law. ―When deciding whether the parties
agreed to arbitrate a certain matter (including arbitrability), courts generally . . .
should apply ordinary state-law principles that govern the formation of contracts.‖
(First Options of Chicago, Inc. v. Kaplan, supra, 514 U.S. at p. 944; see DIRECTV
v. Imburgia (2015) ___ U.S. ___, ___ [193 L.Ed.2d 365, 372, 136 S.Ct. 463, 468];
Volt Info. Sciences v. Leland Stanford Jr. U. (1989) 489 U.S. 468, 474.) This
default choice-of-law rule applies to the question whether the availability of class
arbitration is for an arbitrator or a court; insofar as the question who decides
―presents a disputed issue of contract interpretation,‖ ―state law, not federal law,
normally governs such matters.‖ (Green Tree, supra, 539 U.S. at p. 450 (plur.
opn. of Breyer, J.); accord, id. at p. 454 (conc. opn. of Stevens, J.) [applying state
law]; id. at pp. 457–458 (dis. opn of Rehnquist, C. J.) [agreeing that ― ‗[s]tates
may regulate contracts, including arbitration clauses, under general contract law
principles‘ ‖ and ― ‗[t]he interpretation of private contracts is ordinarily a question
of state law‘ ‖].
The parties do not disagree as to which state‘s law applies: California. The
arbitration clauses were entered into in California, govern an employment
5
relationship between a California resident and a company with its sole place of
business in California, and invoke various provisions of California law throughout.
B.
The Application of State Contract Law to These Agreements
Lebo Automotive had Sandquist sign three different form agreements.
Each contains an arbitration clause. The language in each clause defining the
scope of arbitrable matters varies slightly, but is materially the same.
The clause in the ―Applicant‘s Statement & Agreement‖ provides in part:
―I and the Company both agree that any claim, dispute, and/or controversy
(including, but not limited to, any claims of discrimination and harassment,
whether they be based on the California Fair Employment and Housing Act, as
well as all other applicable state or federal laws or regulations) which would
otherwise require or allow resort to any court or other governmental dispute
resolution forum between myself and the Company (or its owners, directors,
officers, managers, employees, agents, and parties affiliated with its employee
benefit and health plans) arising from, related to, or having any relationship or
connection whatsoever with my seeking employment with, employment by, or
other association with the Company, whether based on tort, contract, statutory, or
equitable law, or otherwise, (with the sole exception of claims arising under the
National Labor Relations Act which are brought before the National Labor
Relations Board, claims for medical and disability benefits under the California
Workers‘ Compensation Act, and Employment Development Department claims
shall be submitted to and determined exclusively by binding arbitration.‖
The clause in the ―Mandatory Arbitration Agreement‖ provides: ―I agree
that any claim, dispute, and/or controversy (including, but not limited to any
claims of discrimination and harassment) which would otherwise require or allow
resort to any court or other governmental dispute resolution forum, between me
and the Company (or its owners, directors, officers, managers, employees[,]
6
agents, and parties affiliated with its employee benefits and health plans) arising
from, related to, or having any relationship or connection whatsoever with my
seeking employment with, employment by, or other association with, the
Company, whether based on tort, contract, statutory, or equitable law, or
otherwise, shall be submitted to and determined exclusively by binding
arbitration . . . .‖
Finally, the clause in the ―Employee Acknowledgement and Agreement‖
provides: ―I agree that any claim, or dispute, or controversy (including, but not
limited to, any and all claims of discrimination and harassment) which would
otherwise require or allow resort to any court or other governmental dispute
resolution forum between myself and the Company (or its owners, directors,
officers, managers, employees, agents, and parties affiliated with its employee
benefit and health plans) arising from, related to, or having any relationship or
connection whatsoever with my seeking employment with, employment by, or
other association with the Company, whether based on tort, contract, statutory, or
equitable law, or otherwise, (with the sole exception of claims arising under the
National Labor Relations Act which are brought before the National Labor
Relations Board, claims for medical and disability benefits under the California
Workers Compensation Act, and Employment Development Department claims),
shall be submitted to and determine[d] exclusively by binding arbitration . . . .‖
All three arbitration provisions share the same basic structure and much of
the same language. All three contain two inclusive clauses that define the range of
disputes that must be ―submitted to and determined exclusively by binding
arbitration.‖ Two of the three add an exclusive clause that sets out a specific,
limited set of disputes, otherwise covered by the clause‘s inclusive language, that
are nevertheless withdrawn from the arbitrator‘s purview.
7
First, the provisions extend to ―any claim, dispute, and/or controversy
(including, but not limited to any [and all] claims of discrimination and
harassment) which would otherwise require or allow resort to any court or other
governmental dispute resolution forum, between [me/myself] and the Company.‖
This language is comprehensive. If a dispute or controversy is between Sandquist
and Lebo Automotive, as the one before us surely is, and if it might otherwise be
permissibly submitted to a court, as the question whether class arbitration is
available surely could be, this portion of the arbitration clause suggests a choice to
have the decision made by an arbitrator.
Second, the provisions extend to all claims ―arising from, related to, or
having any relationship or connection whatsoever with my seeking employment
with, employment by, or other association with the Company, whether based on
tort, contract, statutory, or equitable law, or otherwise.‖ (Italics added.) The
underlying claims in the first amended complaint assert that Lebo Automotive
harassed and discriminated against Sandquist on the basis of race in the course of
his employment, created a hostile work environment, and ultimately constructively
discharged him. They plainly arise from Sandquist‘s employment with Lebo
Automotive. The procedural question those claims present—whether Sandquist
may pursue his claims on a class basis—directly arises from his underlying claims.
Given that the provisions are intended to sweep in disputes ―having any
relationship or connection whatsoever‖ with Sandquist‘s employment, that the
issue before us arises from a lawsuit over Sandquist‘s employment would appear
enough to satisfy this nexus requirement.
Finally, both the Applicant‘s Statement & Agreement and the Employee
Acknowledgement and Agreement (although not the Mandatory Arbitration
Agreement) contain an additional clause identifying specific disputes otherwise
within the broad inclusive clauses of the arbitration provisions but intended not to
8
be arbitrable. Every dispute within those inclusive clauses is for the arbitrator,
―with the sole exception of claims arising under the National Labor Relations Act
which are brought before the National Labor Relations Board, claims for medical
and disability benefits under the California Workers‘ Compensation Act, and
Employment Development Department claims.‖ The drafter of these agreements
might well have specified other matters not for the arbitrator, such as the
availability of class arbitration at issue here, but did not.
These features of the arbitration clauses suggest the ―who decides‖ question
is an arbitrable one, but they are by no means conclusive. In the presence of
ambiguity, we turn to other principles applicable to the interpretation of arbitration
clauses and contracts generally.
When construing arbitration provisions, we must consider the parties‘ likely
expectations about allocations of responsibility. (See Howsam v. Dean Witter
Reynolds, Inc. (2002) 537 U.S. 79, 83, 86.) ―Typically, those who enter into
arbitration agreements expect that their dispute will be resolved without necessity
for any contact with the courts.‖ (Blanton v. Womancare, Inc. (1985) 38 Cal.3d
396, 402, fn. 5, italics added.) In the many cases where the parties agree an
underlying dispute is arbitrable and thus begin with a filing before an arbitrator, to
resolve the ―who decides‖ question in favor of a court would contravene that
expectation and impose substantial additional cost and delay, requiring the parties
to stay matters before the arbitrator, proceed to a courthouse for a construction of
their arbitration agreement, perhaps continue through appellate review of that
construction, and only then return back to arbitration for further dispute resolution.
Here, the parties‘ arbitration provision declares a preference for arbitration
because of its ―reduced expense and increased efficiency.‖ (See Hall Street
Associates, L.L.C. v. Mattel, Inc. (2008) 552 U.S. 576, 588 [touting ―arbitration‘s
essential virtue of resolving disputes straightaway‖].) But ―[r]eferring preliminary
9
issues to the courts can cause ‗ ―serious delay and confusion, thus robbing the
arbitration procedure of much of its value to the parties.‖ ‘ ‖ (Ericksen, Arbuthnot,
McCarthy, Kearney & Walsh, Inc. v. 100 Oak Street (1983) 35 Cal.3d 312, 323.
We will not lightly assume Lebo, or Sandquist, would have expected or preferred
a notably less efficient allocation of decisionmaking authority.
Ultimately dispositive here are two other long-established interpretive
principles. First, under state law as under federal law, when the allocation of a
matter to arbitration or the courts is uncertain, we resolve all doubts in favor of
arbitration. (Wagner Construction Co. v. Pacific Mechanical Corp. (2007) 41
Cal.4th 19, 26; Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951,
971; see Mastrobuono v. Shearson Lehman Hutton, Inc. (1995) 514 U.S. 52, 62 &
fn. 8.) All else being equal, this presumption tips the scales in favor of allocating
the class arbitration availability question to the arbitrator.
Second, ambiguities in written agreements are to be construed against their
drafters. (Civ. Code, § 1654; Rest.2d Contracts, § 206.) As the Restatement
explains, ―Where one party chooses the terms of a contract, he is likely to provide
more carefully for the protection of his own interests than for those of the other
party. He is also more likely than the other party to have reason to know of
uncertainties of meaning. Indeed, he may leave meaning deliberately obscure,
intending to decide at a later date what meaning to assert. In cases of doubt,
therefore, so long as other factors are not decisive, there is substantial reason for
preferring the meaning of the other party.‖ (Rest.2d Contracts, § 206, com. a, p.
105; see Mastrobuono v. Shearson Lehman Hutton, Inc., supra, 514 U.S. at p. 63
[―The reason for this rule is to protect the party who did not choose the language
from an unintended or unfair result.‖].
Thus, where, as here, the written agreement has been prepared entirely by
the employer, it is a ―well established rule of construction‖ that any ambiguities
10
must be construed against the drafting employer and in favor of the nondrafting
employee. (Pacific Lbr. Co. v. Ind. Acc. Com. (1943) 22 Cal.2d 410, 422; accord,
24 Hour Fitness, Inc. v. Superior Court (1998) 66 Cal.App.4th 1199, 1215.
Moreover, ―[t]he rule requiring the resolution of ambiguities against the drafting
party ‗applies with peculiar force in the case of a contract of adhesion. Here the
party of superior bargaining power not only prescribes the words of the instrument
but the party who subscribes to it lacks the economic strength to change such
language.‘ ‖ (Graham v. Scissor-Tail, Inc. (1981) 28 Cal.3d 807, 819, fn. 16.) On
the record before us, there is no dispute that the arbitration clauses were part of
contracts of adhesion drafted by Lebo Automotive and imposed as conditions of
employment.
This general principle of contract interpretation applies equally to the
construction of arbitration provisions. (Mastrobuono v. Shearson Lehman Hutton,
Inc., supra, 514 U.S. at pp. 62–63; Victoria v. Superior Court (1985) 40 Cal.3d
734, 739; 24 Hour Fitness, Inc. v. Superior Court, supra, 66 Cal.App.4th at
p. 1215.) Where the drafter of a form contract has prepared an arbitration
provision whose application to a particular dispute is uncertain, ordinary contract
principles require that the provision be construed against the drafter‘s
interpretation and in favor of the nondrafter‘s interpretation. (Victoria, at pp. 745–
747.
Lebo Automotive could have written the description of matters within the
arbitrator‘s purview less comprehensively. It could have prepared an arbitration
provision that explicitly addressed any unstated desire to have the availability of
class arbitration resolved by a court, notwithstanding the otherwise broad and all-
encompassing language of the clause identifying matters for the arbitrator. It did
not. To the extent that omission creates any ambiguity, it is Lebo that ―drafted an
ambiguous document, and . . . cannot now claim the benefit of the doubt.‖
11
(Mastrobuono v. Shearson Lehman Hutton, Inc., supra, 514 U.S. at p. 63.) We
conclude, as a matter of state contract law, the parties‘ arbitration provisions
allocate the decision on the availability of class arbitration to the arbitrator, rather
than reserving it for a court.
C.
There Is No Established Contrary State Law Presumption
Lebo Automotive argues that as a matter of state law these arbitration
provisions should presumptively be read to allocate the class arbitration
availability question to a court, absent any explicit commitment of the dispute to
an arbitrator. Lebo rests this argument on our recent decision in City of Los
Angeles v. Superior Court (2013) 56 Cal.4th 1086. We agree that the arbitration
provisions, though most fairly read as allocating the class arbitration question to
an arbitrator, do not explicitly do so. But we disagree that City of Los Angeles
establishes any state law presumption that would in these circumstances require
submission of the question to a court.
City of Los Angeles involved the construction of an arbitration provision in
a collectively bargained memorandum of understanding. The City of Los Angeles
had responded to a fiscal crisis with unilateral furloughs. Various public
employee unions filed grievances over the furloughs, followed by petitions to
compel arbitration. No party disputed the proposition, well settled under both
state and federal law, that absent the parties‘ commitment of the arbitrability
decision to an arbitrator, disagreements over whether a particular dispute is within
the scope of an arbitration provision are ordinarily the responsibility of a court.
(City of Los Angeles v. Superior Court, supra, 56 Cal.4th at pp. 1093, 1096; see
First Options of Chicago, Inc. v. Kaplan, supra, 514 U.S. at p. 944; Freeman v.
State Farm Mut. Auto. Ins. Co. (1975) 14 Cal.3d 473, 479–480.) City of Los
Angeles broke no new ground on this point.
12
As Lebo Automotive asserts, City of Los Angeles confirms the strong
presumption that courts should determine the jurisdiction of arbitrators. (See City
of Los Angeles v. Superior Court, supra, 56 Cal.4th at p. 1096; Code Civ. Proc.,
§ 1281.2 [on a petition to compel arbitration, ―the court‖ should order arbitration
―if it determines that an agreement to arbitrate the controversy exists‖].) That is
what we, a court, are tasked with doing here; consistent with the presumption, we
are engaged in deciding whether a decision on the availability of class arbitration
is for a court or an arbitrator.
Lebo Automotive‘s argument rests on the assumption that as a matter of
state law, the underlying question concerning the availability of class arbitration
should itself be deemed a question of arbitrability for courts. In support, Lebo
relies not only on City of Los Angeles but on the acknowledgement in Garcia v.
DIRECTV, Inc. (2004) 115 Cal.App.4th 297, 298 of pre-Green Tree state cases
vesting the decision on the availability of class arbitration with trial courts. In the
first of those earlier cases, this court held trial courts could, in their discretion,
condition enforcement of an adhesive arbitration agreement on having the
arbitration proceed on a class basis. (Keating v. Superior Court (1982) 31 Cal.3d
584, 608–614, revd. in part on other grounds sub nom. Southland Corp. v. Keating
(1984) 465 U.S. 1.) But neither Keating nor cases following it (see Sanders v.
Kinko’s, Inc. (2002) 99 Cal.App.4th 1106, 1113–1114; Blue Cross of California v.
Superior Court (1998) 67 Cal.App.4th 42, 60; Izzi v. Mesquite Country Club
(1986) 186 Cal.App.3d 1309, 1319–1322; Lewis v. Prudential-Bache Securities,
Inc. (1986) 179 Cal.App.3d 935, 945–946) acknowledged that the availability of
class arbitration is in the first instance a matter of party consent,2 nor did they
2
To the extent Keating and its progeny hold a court may order class
arbitration based on the interests of justice and without regard to the parties‘
(footnote continued on next page)
13
directly address the issue we face today and announce a state law pro-court, anti-
arbitrator presumption. Neither City of Los Angeles nor any other state case
establishes a presumption the availability of class arbitration is to be decided by
courts.
Nor need we decide, as a matter of first impression, whether state law
embraces a particular pro-court or pro-arbitrator presumption. All three of the
signed arbitration clauses here invoke the coverage of the Federal Arbitration Act.
(9 U.S.C. § 1 et seq. (FAA).) While the parties have agreed to arbitrate ―in
conformity with the procedures of the California Arbitration Act,‖ and while
parties may elect to follow state procedures in lieu of the FAA‘s procedures (Volt
Info. Sciences v. Leland Stanford Jr. U., supra, 489 U.S. at p. 477; DIRECTV v.
Imburgia, supra, ___ U.S. at p. ___ [193 L.Ed.2d at p. 372, 136 S.Ct. at p. 468]),
the procedures the California Arbitration Act spells out do not specifically address
the question of class arbitration availability (see Code Civ. Proc., § 1280 et seq.;
cf. Am. Arbitration Assn., Supplementary Rules for Class Arbitration (2003) rule
3 [allocating the class availability question to the arbitrator]; JAMS, Class Action
Procedures (2009) rule 2 [same]). Consequently, unlike in Volt Info. Sciences, this
is not a case where the parties by agreement have expressly opted for the
application of state law in lieu of any otherwise applicable federal rule. In the
absence of such an opt out, the issue whether the availability of class arbitration is
(footnote continued from previous page

wishes (see Keating v. Superior Court, supra, 31 Cal.3d at pp. 613–614), they are
no longer good law (see Stolt-Nielsen S. A. v. AnimalFeeds Int’l Corp., supra, 559
U.S. at p. 684 [―a party may not be compelled under the FAA to submit to class
arbitration unless there is a contractual basis for concluding that the party agreed
to do so‖]).
14
a question of arbitrability subject to a pro-court presumption arises in the shadow
of federal law. Any state law presumption, were there one, would have to yield to
whatever presumption the FAA establishes. We thus turn to federal law.
II.
The FAA’s Presumptions
The crux of this case is whether the FAA imposes an interpretive
presumption that, as a matter of federal law, preempts state law rules of contract
interpretation and alters the conclusion state law would otherwise reach here.
Congressional intent is the touchstone of any preemption analysis (e.g., Quesada
v. Herb Thyme Farms, Inc. (2015) 62 Cal.4th 298, 318; Brown v. Mortenson
(2011) 51 Cal.4th 1052, 1060), but neither the FAA‘s text nor its legislative
history speaks to the question we face or offers insight as to that intent.
Accordingly, we look to judicial understandings of the FAA.
The United States Supreme Court has directly addressed the ―who decides‖
issue only once, in Green Tree, supra, 539 U.S. 444. The Green Tree parties‘
agreement submitted to the arbitrator ― ‗[a]ll disputes, claims, or controversies
arising from or relating to this contract or the relationships which result from this
contract.‘ ‖ (Id. at p. 451 (plur. opn. of Breyer, J.).) The plurality interpreted this
language as allocating the class arbitration availability question to the arbitrator.
(Id. at p. 452.) Furthermore, the same four justices explained, nothing in the FAA
subjects the ―who decides‖ question to any contrary pro-court presumption.
(Green Tree, at pp. 452–453.) Accordingly, the plurality concluded ―this matter of
contract interpretation should be for the arbitrator, not the courts, to decide.‖ (Id.
at p. 453.
However, as the United States Supreme Court has twice reiterated in cases
not directly addressing the ―who decides‖ question, Green Tree contains no
controlling view concerning what presumption, if any, the FAA requires when
interpreting the parties‘ agreement as to who decides class arbitration availability.
15
(See Stolt-Nielsen S. A. v. AnimalFeeds Int’l Corp., supra, 559 U.S. at pp. 678–
679; Oxford Health Plans LLC v. Sutter, supra, 569 U.S. at p. ___, fn. 2 [186
L.Ed.2d at p. 119, fn. 2, 133 S.Ct. at p. 2068, fn. 2].) The issue thus remains
unresolved. While accepting that extant Supreme Court cases do not decide the
matter (dis. opn., post, p. 7), the dissent argues that from what they do decide, it is
only a small leap to the conclusion that the availability of class arbitration is a
question to presumptively withhold from the arbitrator (id. at p. 9). In the absence
of controlling authority, however, we must resist the urge to take that leap without
convincing evidence the FAA imposes an anti-arbitral presumption that overrides
the state law reading of the parties‘ arbitration clause. In our view, the FAA does
not.
The Supreme Court has interpreted the FAA as imposing two distinct
presumptions, depending on the subject matter. ―On the one hand, courts presume
that the parties intend courts, not arbitrators, to decide . . . disputes about
‗arbitrability,‘ ‖ e.g., whether there is an enforceable arbitration agreement or
whether it applies to the dispute at hand. (BG Group PLC v. Republic of
Argentina (2014) 572 U.S. ___, ___ [188 L.Ed.2d 220, 228, 134 S.Ct. 1198,
1206]; see Howsam v. Dean Witter Reynolds, Inc., supra, 537 U.S. at pp. 83–84.
―On the other hand, courts presume that the parties intend arbitrators, not courts, to
decide disputes about the meaning and application of particular procedural
preconditions for the use of arbitration.‖ (BG Group, at p. ___ [188 L.Ed.2d at
p. 229, 134 S.Ct. at p. 1207]; see Howsam, at pp. 84–85.
These presumptions make sense; unless the parties specify otherwise, one
would assume they should not be required to submit to an arbitrator the questions
whether they have agreed to submit to an arbitration at all or arbitrate a given
dispute. After all, because ―[a]rbitration is strictly ‗a matter of consent‘ ‖
(Granite Rock Co. v. Teamsters (2010) 561 U.S. 287, 299, quoting Volt Info.
16
Sciences v. Leland Stanford Jr. U., supra, 489 U.S. at p. 479), ― ‗a party cannot be
required to submit to an arbitration any dispute which he has not agreed so to
submit‘ ‖ (Howsam v. Dean Witter Reynolds, Inc., supra, 537 U.S. at p. 83,
quoting Steelworkers v. Warrior & Gulf Co. (1960) 363 U.S. 574, 582). To
presume arbitrability without first establishing, independently, consent to
arbitration is to place the proverbial cart before the horse.
Once gateway questions of arbitrability have been settled, however, the
FAA switches presumptions for issues affecting the manner in which an
arbitration is to be conducted. ―Thus ‗ ―procedural‖ questions which grow out of
the dispute and bear on its final disposition‘ are presumptively not for the judge,
but for an arbitrator, to decide.‖ (Howsam v. Dean Witter Reynolds, Inc., supra,
537 U.S. at p. 84.) The pro-court presumption has only a ―limited scope‖ (id. at
p. 83), while the range of questions not qualifying as threshold gateway inquiries
is correspondingly broad; for example, even a challenge to the enforceability of
the entire contract in which an arbitration clause appears is presumptively for the
arbitrator, not the court. (Buckeye Check Cashing, Inc. v. Cardegna (2006) 546
U.S. 440, 446.
The Green Tree plurality squarely considered in which category the
question we face should fall, i.e., whether the availability of class arbitration
should presumptively be for the court or the arbitrator. The plurality reasoned,
persuasively in our view, that this question does not fall within the ―narrow‖ class
of questions subject to a pro-court presumption. (Green Tree, supra, 539 U.S. at
p. 452.) Whether an agreement forbids class arbitration concerns ―neither the
validity of the arbitration clause nor its applicability to the underlying dispute
between the parties.‖ (Ibid.) It does not touch on any threshold matter necessary
to establish as a condition precedent an agreement to arbitrate, but rather entails
―what kind of arbitration proceeding the parties agreed to.‖ (Ibid.) The question
17
involves ―contract interpretation and arbitration procedures. Arbitrators are well
situated to answer that question.‖ (Id. at p. 453.
As the Green Tree plurality recognized, the availability or unavailability of
class arbitration has nothing to do with whether the parties agreed to arbitrate,
either in general or with respect to a specific dispute. Instead, the question is of
the ―what kind of proceeding‖ sort that arises subsequent to the gateway issue of
whether to have an arbitral proceeding at all. (See AT&T Mobility LLC v.
Concepcion (2011) 563 U.S. 333, 348–351 [describing in detail how the shift to
class arbitration involves a change in arbitral procedures].) Once the threshold
matter of whether to arbitrate has been decided, assigning (presumptively, at least
any further questions turning on contract interpretation to the arbitrator is neither
circular nor otherwise problematic. (See Employers Ins. of Wausau v. Century
Indem. (7th Cir. 2006) 443 F.3d 573, 578 [once it is established the parties have
agreed to arbitrate a given dispute, questions about ―the kind of arbitration
proceeding‖ they have agreed to are ―a matter of contract interpretation, which the
arbitrator is well qualified to address‖]; Shaw’s Supermarkets v. United Food,
Local 791 (1st Cir. 2003) 321 F.3d 251, 254 [once arbitrability is decided,
propriety of consolidating multiple arbitrations ―is a procedural matter for the
arbitrator‖].
Notably, the principal Green Tree dissent did not disagree with the plurality
on this point; that is, it did not contend that the availability of class arbitration is
the sort of question that universally should be subject to a pro-court presumption.3
3
Nor did Justice Thomas in his separate dissent. He took the position that
the FAA has no application at all to state court proceedings; categorically, in state
court cases, ―the FAA cannot be a ground for pre-empting a state court‘s
interpretation of a private arbitration agreement.‖ (Green Tree, supra, 539 U.S. at
(footnote continued on next page)
18
Rather, the principal dissent‘s rationale hinged on the language of a contract-
specific provision relating to selection of the arbitrator that in their view should
have required initial decisionmaking by a court. According to the dissent, the
proper construction of a specific agreement concerning arbitrator selection is the
sort of gateway matter that a court should resolve. (Green Tree, supra, 539 U.S. at
p. 457 (dis. opn. of Rehnquist, C. J. [joined by O‘Connor & Kennedy, JJ.].) The
arbitration agreement at issue in Green Tree contained a selection clause that, in
the dissent‘s view, entitled the clause‘s drafter to choose a different arbitrator for
every dispute, a right that allowing arbitration on a classwide basis before a single
decision maker would have contravened. (Id. at p. 459.) Accordingly, under the
specific circumstances of the Green Tree contract, the dissent contended class
availability had to be resolved by a court.4
One may understand the lines drawn by both the Green Tree plurality and
the principal dissent as turning on which issues logically or necessarily must be
resolved at the gateway, or threshold, before a case can feasibly go to an arbitrator.
One such logical condition precedent is whether, in fact, the parties agreed to
(footnote continued from previous page

p. 460 (dis. opn. of Thomas, J.).) Applied here, that view would lead to the same
conclusion we reach.
4
Whatever the merits of the Green Tree principal dissent‘s argument on the
facts of that case, it does not apply here. The only provision in these parties‘
agreements that speaks to the arbitrator‘s identity says: ―In addition to
requirements imposed by law, any arbitrator herein shall be a retired California
Superior Court Judge and shall be subject to disqualification on the same grounds
as would apply to a judge of such court.‖ There is no ―express agreement of the
parties as to how the arbitrator would be chosen‖ (Green Tree, supra, 539 U.S. at
p. 459 (dis. opn. of Rehnquist, C. J.)) that could be violated by allowing an
arbitrator to decide whether class arbitration is available.
19
arbitrate at all; it makes no sense to compel parties to go before an arbitrator
without first determining they agreed to do so. Another logically essential
precedent matter is whether an instant dispute is within the scope of what the
parties agreed to arbitrate; again, this question must be determined by someone
other than the arbitrator—a court—before the dispute may be subject to
arbitration. One might reasonably add to these, as the principal Green Tree
dissent did, any disputes over how the arbitrator is to be chosen. (Green Tree,
supra, 539 U.S. at p. 457 (dis. opn. of Rehnquist, C. J.).) What matters in each
instance is not the stakes per se, but the logical relation of the issue as a condition
precedent to an arbitration. No similar logical relation places the availability of
classwide arbitration in the category of questions that must be resolved before any
arbitrator will be able to entertain a dispute.
Two other established FAA principles also weigh in favor of allocating the
question to the arbitrator. First, a presumption that arbitrators decide the
availability of class arbitration is more consistent with the desire for ―expeditious
results‖ that motivates many an arbitration agreement. (Mitsubishi Motors v. Soler
Chrysler-Plymouth (1985) 473 U.S. 614, 633; see ante, pp. 9–10.) Congress
intended through the FAA ―to move the parties to an arbitrable dispute out of court
and into arbitration as quickly and easily as possible.‖ (Moses H. Cone Memorial
Hospital v. Mercury Constr. Corp. (1983) 460 U.S. 1, 22; accord, Preston v.
Ferrer (2008) 552 U.S. 346, 357.) ―Once it is determined . . . that the parties are
obligated to submit the subject matter of a dispute to arbitration, ‗procedural‘
questions which grow out of the dispute and bear on its final disposition should be
left to the arbitrator.‖ (John Wiley & Sons v. Livingston (1964) 376 U.S. 543,
557.) To reserve for a court more than the bare minimum inquiry necessary to
confirm an enforceable agreement to arbitrate would entail a delay at odds with
congressional pro-arbitration purposes. (Id. at p. 558; see Prima Paint Corp. v.
20
Flood & Conklin Mfg. Co. (1967) 388 U.S. 395, 404 [the FAA embraces ―the
unmistakably clear congressional purpose that the arbitration procedure, when
selected by the parties to a contract, be speedy and not subject to delay and
obstruction in the courts‖].
Second, among those principles most firmly established under the FAA is
―that, as a matter of federal law, any doubts concerning the scope of arbitrable
issues should be resolved in favor of arbitration.‖ (Moses H. Cone Memorial
Hospital v. Mercury Constr. Corp., supra, 460 U.S. at pp. 24–25.) Thus, if it is
uncertain whether the issue is one for the courts or the arbitrator, we are well
advised to allocate it to the arbitrator. This interpretive rule applies even here,
where the uncertainty is over whether to place a question in the ―presumptively for
the court‖ or ―presumptively for the arbitrator‖ category; if that question is close,
as indeed it is, we resolve doubt in favor of placing the question in the
―presumptively for the arbitrator‖ category. (See Green Tree, supra, 539 U.S. at
p. 452 (plur. opn. of Breyer, J.); Shaw’s Supermarkets v. United Food, Local 791,
supra, 321 F.3d at pp. 254–255.
In support of the opposite conclusion, Lebo Automotive relies on other
recent appellate decisions that have concluded the availability of classwide
arbitration is a ―gateway question‖ for the court: Reed Elsevier, Inc. v. Crockett
(6th Cir. 2013) 734 F.3d 594, 597 (Reed Elsevier), Opalinski v. Robert Half
Intern. Inc. (3d Cir. 2014) 761 F.3d 326, 334 (Opalinski), and Garden Fresh
Restaurant Corp. v. Superior Court (2014) 231 Cal.App.4th 678, 687.
Reed Elsevier reasons that the availability of class arbitration is an
important question and is therefore a gateway question arbitrators should not be
permitted to address unless the parties have expressly so provided. (Reed Elsevier,
supra, 734 F.3d at p. 598 [identifying gateway questions for the court as those that
are ―fundamental‖ and subsidiary questions for an arbitrator as those that involve
21
―details‖].) But the distinction between gateway questions and nongateway
questions, between questions for the court and for the arbitrator, is not one that
focuses on a question‘s significance. Rather, the United States Supreme Court has
drawn the line based not on importance, but on what the parties would have
expected. (E.g., Howsam v. Dean Witter Reynolds, Inc., supra, 537 U.S. at
pp. 83–84; First Options of Chicago, Inc. v. Kaplan, supra, 514 U.S. at pp. 944–
945.) And as the First Circuit has said in applying this expectations test, ―parties
who have agreed to arbitrate a given subject most likely intend and expect that the
arbitrator should resolve all issues that arise concerning that subject; if they do not,
we think they would clearly express their contrary intent.‖ (PaineWebber Inc. v.
Elahi (1st Cir. 1996) 87 F.3d 589, 599.) Like the First Circuit, we decline to
assume parties committing disputes to arbitration would have intended to confine
arbitrators to the resolution of only subsidiary matters.
At oral argument, Lebo emphasized the higher stakes class arbitration may
entail and the limited nature of appellate review (see AT&T Mobility LLC v.
Concepcion, supra, 563 U.S. at pp. 348, 350; Reed Elsevier, supra, 734 F.3d at
p. 598), and urged these features might reduce the likelihood that defendants, at
least, would expect the availability of class arbitration to be resolved by an
arbitrator. But every question resolved by an arbitrator is subject to limited
review; forsaking broad appellate review is a routine part of the trade-off involved
in opting for arbitration. (Mitsubishi Motors v. Soler Chrysler-Plymouth, supra,
473 U.S. at p. 628.) Nothing about the class arbitration availability question,
among all the many questions that might be resolved by an arbitrator, supports
presuming under federal law that parties otherwise eager to move dispute
resolution out of the courtroom uniformly hold an unexpressed expectation, based
on concerns about limited review, that the class availability question should be
reserved for the courts. As for an increase in stakes, the procedural shift from
22
multiple bilateral arbitrations to a single class arbitration does nothing to alter a
defendant‘s potential aggregate liability. (Shady Grove Orthopedic Associates v.
Allstate Ins. (2010) 559 U.S. 393, 408 (plur. opn. of Scalia, J.).) To the extent the
question whether such a shift is permitted by the parties‘ agreement may
nevertheless be viewed as of exceeding importance, nothing in the FAA evinces a
congressional purpose to keep higher stakes decisions from arbitrators, or to
presume parties otherwise favorably disposed to arbitration would prefer that
course.5
Garden Fresh Restaurant applies the same problematic logic as Reed
Elsevier, reasoning from United States Supreme Court cases addressing the
significance of the availability of classwide arbitration that the issue is one parties
would prefer to keep from arbitrators absent express contrary agreement. (Garden
Fresh Restaurant Corp. v. Superior Court, supra, 231 Cal.App.4th at pp. 686–687,
discussing AT&T Mobility LLC v. Concepcion, supra, 563 U.S. at pp. 348–351
and Stolt-Nielsen S. A. v. AnimalFeeds Int’l Corp., supra, 559 U.S. at pp. 686–
687; cf. Lee v. JPMorgan Chase & Co. (C.D.Cal. 2013) 982 F.Supp.2d 1109,
1113–1114 [explaining how the Supreme Court‘s class arbitration discussions in
Concepcion and Stolt-Nielsen are relevant to the standard for determining the
availability of class arbitration, rather than the prior question who decides whether
class arbitration is available].) This assumption, that parties who enter an
5
Individual claims, if they involve allegations of sufficiently egregious
misconduct, can involve exposure exceeding that even many class claims might
entail. It has never been suggested that the purposes of the FAA require a
presumption that claims beyond a certain size should not go to arbitration, simply
because the consequences of the arbitrator‘s decision may differ quantitatively
from the run-of-the-mill case. Rather, those questions reserved for a court by the
FAA are ones that differ qualitatively, involving conditions logically precedent to
any arbitration.
23
arbitration agreement diverting resolution of the merits of claims from courts to
arbitrators would simultaneously be unwilling to have critical related procedural
issues resolved by those same arbitrators, is one we do not embrace.6
The third case, Opalinski, offers slightly different reasoning. It observes
that parties have the right to choose with whom they arbitrate, and courts typically
resolve whether and how that right has been exercised. (Opalinski, supra, 761
F.3d at pp. 332–333, citing Stolt-Nielsen S. A. v. AnimalFeeds Int’l Corp., supra,
559 U.S. at pp. 683, 686.) The determination that an agreement allows for class
arbitration has the potential to add many additional parties to the arbitration, and
thus ―affects whose claims may be arbitrated.‖ (Opalinski, at p. 332.) Absent
class members similarly have a right to determine with whom they arbitrate, and
might not be bound absent an opt-in procedure evincing consent to have an
arbitrator resolve their claims in a class proceeding. (Id. at p. 333, citing Oxford
Health Plans LLC v. Sutter, supra, 569 U.S. at p. ___ [186 L.Ed.2d at p. 123, 133
6
The dissent likewise rests its conclusions on AT&T Mobility LLC v.
Concepcion, supra, 563 U.S. 333 and Stolt-Nielsen S. A. v. AnimalFeeds Int’l
Corp.
, supra, 559 U.S. 662. The lesson it draws from these cases is that class
arbitration is qualitatively different from bilateral arbitration, and therefore the
question of class arbitration availability should be treated as qualitatively different
from other sorts of procedural questions presumptively allocated to an arbitrator.
We agree with the premise but not the conclusion. Concepcion and Stolt-Nielsen
surely establish that class arbitration is different in fundamental ways, and the
determination whether class arbitration is available may be, as just discussed, quite
consequential. But Stolt-Nielsen directly accounts for these differences by
adopting a presumption against class arbitration absent an affirmative agreement
to allow it. (Stolt-Nielsen, at pp. 684–687.) Nothing in Concepcion or Stolt-
Nielsen
gives us either reason to doubt that that presumption will be adequate to its
task of ensuring class arbitration only when the parties have consented, or cause to
read into the pro-arbitration FAA an additional, anti-arbitral presumption that
would treat courts alone as capable of applying the Stolt-Nielsen presumption.
24
S.Ct. at pp. 2071–2072] (conc. opn. of Alito, J.).) Consequently, Opalinski argues,
the issue of class arbitration availability must be resolved first by a court.
This argument fails to account for the fact the pro-court presumption for the
two acknowledged gateway questions—the validity of the agreement and its
application to the subject matter of a given dispute—already ensures court
determination of the parties to any potential class arbitration. Even if an arbitrator
were to conclude class arbitration is permitted, the arbitration would bring in only
parties to the same form of arbitration agreement a court has already determined to
be valid, and the same type of dispute a court has already determined to be within
the scope of that agreement. (Cf. Stolt-Nielsen S. A. v. AnimalFeeds Int’l Corp.,
supra, 559 U.S. at p. 698 (dis. opn. of Ginsburg, J.) [where a proposed class
consists of other parties to a standard arbitration agreement, observing that if
arbitrators were to ―certify the proposed class, they would adjudicate only the
rights of persons ‗with whom‘ [petitioners] agreed to arbitrate, and only ‗issues‘
subject to arbitration‖].) Here, for example, every employee at Lebo was
apparently subject to the identical arbitration agreements upheld by the court. A
determination by an arbitrator that those agreements permitted class proceedings
would not subject Lebo to arbitration with anyone with whom it had not already
agreed to arbitrate; it would simply consolidate actual or potential agreed-to
arbitrations into a single proceeding. Protection of Lebo‘s right to arbitrate only
with whom it chooses does not require that we read into the FAA a pro-court
presumption on the question of class availability.
So, too, with the rights of would-be class members. Any potential binding
arbitration award will arise only after the Lebo form arbitration agreement they too
signed has been determined valid, and will govern only a dispute the trial court has
found to be within the scope of that agreement. To the extent a would-be absent
class member may believe he or she has unique defenses to enforcement of the
25
arbitration agreement, the major arbitration entities provide clear notice and opt-
out rights. (JAMS, Class Action Procedures, supra, rule 4; Am. Arbitration Assn.,
Supplementary Rules for Class Arbitration, supra, rule 5(b), (c).) Those same
rules also require consideration of the full panoply of Federal Rules of Civil
Procedure, rule 23 (28 U.S.C.) requirements before any class is certified. (JAMS,
Class Action Procedures, supra, rule 3; Am. Arbitration Assn., Supplementary
Rules for Class Arbitration, supra, rule 4.) There is no reason to assume a non-
JAMS, non-American Arbitration Association arbitrator would refuse to afford
similar protections—and if the arbitrator did refuse, the resulting award would
doubtless not be binding. (See AT&T Mobility LLC v. Concepcion, supra, 563
U.S. at p. 349 [―For a class-action money judgment to bind absentees in litigation,
class representatives must at all times adequately represent absent class members,
and absent members must be afforded notice, an opportunity to be heard, and a
right to opt out of the class. [Citation.] At least this amount of process would
presumably be required for absent parties to be bound by the results of
arbitration.‖].) Given prehearing notice, an absent class member can decide for
him- or herself whether to abide by the prior court ruling that the arbitration
agreement is enforceable and applicable, or opt out and take his or her chances in a
separate proceeding. In neither instance will the absent class member be subjected
to arbitration without consent or the opportunity to have a court assess the validity
of his or her agreement to arbitrate.7
7
Both Justice Alito and Opalinski express concern that only opt-in
procedures will do, because otherwise ― ‗absent class members [will not have]
authorized the arbitrator to decide on a classwide basis which arbitration
procedures are to be used.‘ ‖ (Opalinski, supra, 761 F.3d at p. 333, quoting
Oxford Health Plans LLC v. Sutter, supra, 569 U.S. at p. ___ [186 L.Ed.2d at p.
123, 133 S.Ct. at p. 2072] (conc. opn. of Alito, J.).) But class arbitration can only
proceed after an arbitrator has determined the arbitration agreement, applicable to
(footnote continued on next page)
26
As a further basis for its conclusion, the Third Circuit interpreted the
class/no-class question as affecting the type of dispute and thus analogous to the
gateway judicial inquiry into whether a specific dispute was within the parties‘
agreement to arbitrate. (Opalinski, supra, 761 F.3d at pp. 333–334.) But the
reason the court determines whether a given dispute is within an agreement to
arbitrate is that, if it is not, then the parties to the controversy have not agreed to
submit themselves to an arbitrator at all. Logically, parties cannot be compelled
to go before an arbitrator without an independent decision maker—the court—first
deciding they have consented to go before that decision maker. (Steelworkers v.
Warrior & Gulf Co., supra, 363 U.S. at p. 582 [―For arbitration is a matter of
contract and a party cannot be required to submit to arbitration any dispute which
he has not agreed so to submit.‖].) In contrast, neither answer to the class/no class
question implicates the parties‘ consent to submit the basic underlying controversy
to arbitration. That arbitration is a matter of consent necessitates reserving issues
of an agreement‘s validity and the scope of its subject matter for a court, but does
not similarly dictate reservation of the class arbitration issue.
Case law aside, Lebo Automotive contends as a policy matter that
arbitrators have background incentives in the form of potential higher fees that
would cause them to favor contract interpretations allowing for class arbitration,
and therefore cannot be entrusted with the decision. Lebo‘s concerns are no
(footnote continued from previous page

present and absent parties, contains precisely such an authorization. There is no
reason to presume that determination will be in error or that opt-out procedures,
adequate in most ordinary class proceedings, will be insufficient to protect absent
parties who disagree with the arbitrator‘s determination or would simply prefer not
to arbitrate on a class basis.
27
different than those the dissent raised in Prima Paint Corp. v. Flood & Conklin
Mfg. Co., supra, 388 U.S. 395, when arguing that, notwithstanding the broad
sweep of the parties‘ ambiguous arbitration clause, questions of contractual fraud
in the inducement should be withdrawn from the arbitrator because of a possible
implicit incentive to find no fraud and thereby increase potential compensation.
(Id. at p. 416 (dis. opn. of Black, J.).) They did not carry the day with the Prima
Paint majority, nor have they with this court; we too have presumptively allocated
fraud in the inducement questions to arbitrators despite the theoretical potential for
a conflict. (See Ericksen, Arbuthnot, McCarthy, Kearney & Walsh, Inc. v. 100
Oak Street, supra, 35 Cal.3d at p. 323.) Also generally uncognizable is the belief
that arbitrators might over time be biased toward the repeat players that bring them
business, and that the arbitral forum thus inherently favors such repeat players.
We may not presume categorically that arbitrators are ill-equipped to disregard
such institutional incentives and rule fairly and equitably; the FAA requires that
we treat arbitration as a coequal forum for dispute resolution. (9 U.S.C. § 2; see,
e.g., Gilmer v. Interstate/Johnson Lane Corp. (1991) 500 U.S. 20, 30–32.)8
As justification for reaching the merits of the availability of class
arbitration, the trial court relied on Stolt-Nielsen S. A. v. AnimalFeeds Int’l Corp.,
supra, 559 U.S. 662 and Kinecta Alternative Financial Solutions, Inc. v. Superior
Court, supra, 205 Cal.App.4th 506. But neither case has any bearing on the
threshold issue, whether a court or arbitrator should address that question. Stolt-
Nielsen expressly does not address it. (Stolt-Nielsen, at p. 680.) Nor does Kinecta
8
In contrast to these blanket, generalized imputations of a potential conflict
to all arbitrators, the rules governing arbitration do provide full protection against
specific conflicts of interest where they exist. (Code Civ. Proc., §§ 1281.85–
1281.95; see Haworth v. Superior Court (2010) 50 Cal.4th 372, 381.
28
address the issue; instead, it simply assumes a court should decide the question,
without referring to the parties‘ agreement to determine what allocation that
agreement makes. (Kinecta, at pp. 517–519.
In sum, neither appellate decisions subsequent to Green Tree, nor the
policy concerns Lebo Automotive raises, persuade us the Green Tree plurality was
wrong. To the contrary, we agree with the plurality that the determination whether
a particular agreement allows for class arbitration is precisely the kind of contract
interpretation matter arbitrators regularly handle. Along with the Green Tree
plurality, we find nothing in the FAA or its underlying policies to support the
contrary presumption, that this question should be submitted to a court rather than
an arbitrator unless the parties have unmistakably provided otherwise.9
III.
Harmless Error
In the alternative, Lebo Automotive argues that any error by the trial court
in taking for itself the interpretation of the parties‘ arbitration agreement on
matters of classwide arbitration was harmless because the trial court‘s
interpretation of the contract was substantively correct. Lebo argues that the Court
of Appeal erred by ordering reversal without first deciding for itself what the
parties‘ contract calls for, and that we likewise should examine the parties‘
agreement and decide whether it provides for classwide arbitration.
We decline to do so. It is no response to a court‘s misapprehension
concerning the proper allocation of an issue of contract interpretation to an
arbitrator to say that the error is not reversible unless yet a second court, also not
9
We disapprove Garden Fresh Restaurant Corp. v. Superior Court, supra,
231 Cal.App.4th 678, to the extent it is inconsistent with this opinion. We also
disapprove Kinecta Alternative Financial Solutions, Inc. v. Superior Court, supra,
205 Cal.App.4th 506, to the extent it suggests the availability of class arbitration is
always an issue for the court.
29
entrusted with the issue of interpretation, disagrees on the merits with the first
improper decision maker. The remedy when an issue has erroneously been
addressed by a court rather than an arbitrator is to remand with instructions that
the correct decision maker consider the issue anew. (See Green Tree, supra, 539
U.S. at pp. 453–454 (plur. opn. of Breyer, J.); Garcia v. DIRECTV, Inc., supra,
115 Cal.App.4th at p. 304.) As in Green Tree, ―the parties have not yet obtained
the arbitration decision that their contracts foresee‖ (Green Tree, at p. 453);
remanding ―enforc[es] the parties‘ arbitration agreements according to their terms‖
(id. at p. 454).
Lebo Automotive argues that state law requires harmless error review in all
cases before reversal will follow. (Cal. Const., art. VI, § 13; Code Civ. Proc.,
§ 475.) Not so; some errors are reversible per se. The error here falls within that
class requiring automatic reversal because its effects are ― ‗unmeasurable‘ ‖ and
― ‗def[y] analysis by ―harmless-error‖ standards.‘ ‖ (People v. Blackburn (2015
61 Cal.4th 1113, 1135; see People v. Collins (2001) 26 Cal.4th 297, 311; Martin v.
County of Los Angeles (1996) 51 Cal.App.4th 688, 698.) We cannot say whether
an arbitrator would have decided the issue the same or differently. Indeed, to deny
remand by insisting an arbitrator would surely have agreed with the trial court‘s
view or our view of the merits of class availability is to recommit the very error
complained of—deprivation of a decision by a contractually agreed-upon decision
maker. The denial of the parties‘ right to their agreed-upon decision maker is thus
the sort of miscarriage of justice that requires reversal without further harmless
error analysis.
30

DISPOSITION
For the foregoing reasons, we affirm the Court of Appeal.
WERDEGAR, J.
WE CONCUR:

CANTIL-SAKAUYE, C. J.
LIU, J.
CUÉLLAR, J.

31





DISSENTING OPINION BY KRUGER, J.
―Class arbitration is a matter of consent: An arbitrator may employ class
procedures only if the parties have authorized them.‖ (Oxford Health Plans LLC
v. Sutter (2013) 569 U.S. ___, ___ [186 L.Ed.2d 113, 133 S.Ct. 2064, 2066]
(Oxford Health).) In this case, the trial court held that the parties‘ agreement did
not authorize class arbitration. Plaintiff Timothy Sandquist argues that the
arbitrator, rather than the court, should have made that determination. The focus
of my disagreement with the majority involves the question of federal law at the
center of this case: Whether, under the Federal Arbitration Act (9 U.S.C. § 1 et
seq. (FAA)), the availability of class arbitration under the parties‘ agreement is a
―gateway question of arbitrability‖ that is presumptively for a court to decide, or
whether it is instead a matter presumptively reserved for the arbitrator.
In Green Tree Financial Corp. v. Bazzle (2003) 539 U.S. 444, 451–452
(Green Tree), a plurality of the United States Supreme Court took the view that
the classwide arbitrability question is a procedural matter, rather than a gateway
question of arbitrability. The majority of this court today draws on the reasoning
of the plurality opinion to reach the same conclusion. But in more recent years,
the United States Supreme Court has not only disavowed any notion that Green
Tree decided the issue, it has also, as another court put it, ―given every indication,
short of an outright holding, that classwide arbitrability is a gateway question
rather than a subsidiary one.‖ (Reed Elsevier, Inc. v. Crockett (6th Cir. 2013) 734
F.3d 594, 598 (Reed Elsevier), cert. denied (2014) ___ U.S. ___ [189 L.Ed.2d 173,
134 S.Ct. 2991].) In light of these post-Green Tree developments, every federal
court of appeals to consider the issue on the merits has concluded — in contrast to
the majority‘s holding today — that whether an arbitration agreement permits
class arbitration is presumptively a question for the court, rather than the
arbitrator. (See p. 8, post.) Because I, too, read the high court‘s cases as
indicating that classwide arbitrability is a gateway question for purposes of the
FAA, I would affirm the trial court‘s decision in this case, and respectfully part
company with my colleagues in the majority.
I.
―While the interpretation of an arbitration agreement is generally a matter
of state law, [citations], the FAA imposes certain rules of fundamental importance,
including the basic precept that arbitration ‗is a matter of consent, not coercion,‘
[citation].‖ (Stolt-Nielsen S. A. v. AnimalFeeds Int’l Corp. (2010) 559 U.S. 662,
681 (Stolt-Nielsen).) Once a court has determined that the parties have agreed to
submit a dispute to arbitration, the law presumes that the parties have also agreed
to allow the arbitrator to decide subsidiary questions concerning arbitration
procedure, resolving any doubts in favor of the ― ‗liberal federal policy favoring
arbitration agreements.‘ ‖ (Howsam v. Dean Witter Reynolds, Inc. (2002) 537
U.S. 79, 83 (Howsam).) But the law makes an exception to this rule for what the
United States Supreme Court refers to as ― ‗question[s] of arbitrability‘ ‖ (ibid.),
which ―include certain gateway matters, such as whether the parties have a valid
arbitration agreement at all or whether a concededly binding arbitration clause
applies to a certain type of controversy‖ (Green Tree, supra, 539 U.S. at p. 452).
Courts will not assume that the parties agreed to arbitrate such gateway matters
―unless there is ‗clea[r] and unmistakabl[e]‘ evidence‖ to that effect. (First
Options of Chicago, Inc. v. Kaplan (1995) 514 U.S. 938, 944 (First Options).
2
This, the high court has explained, is because to interpret ―silence or ambiguity‖ in
the parties‘ agreement as consent to submit the matter to an arbitrator ―might too
often force unwilling parties to arbitrate a matter they reasonably would have
thought a judge, not an arbitrator, would decide.‖ (First Options, supra, 514 U.S.
at p. 945.) The rule governing ― ‗question[s] of arbitrability‘ ‖ thus applies in
―circumstance[s] where contracting parties would likely have expected a court to
have decided the gateway matter, where they are not likely to have thought that
they had agreed that an arbitrator would do so, and, consequently, where reference
of the gateway dispute to the court avoids the risk of forcing parties to arbitrate a
matter that they may well not have agreed to arbitrate.‖ (Howsam, supra, 537
U.S. at pp. 83–84.
In accordance with these principles, the resolution of a ― ‗question of
arbitrability‘ ‖ is reviewable by courts de novo. (Oxford Health, supra, 569 U.S.
at p. ___, fn. 2 [186 L.Ed.2d at p. 119, fn. 2, 133 S.Ct. at p. 2068, fn. 2].) By
contrast, under the FAA, decisions assigned to an arbitrator are reviewable for
―misconduct rather than mistake.‖ (AT&T Mobility LLC v. Concepcion (2011
563 U.S. 333, 350–351 (Concepcion).) When an arbitrator has been given the
authority to decide whether a party‘s agreement provides for class arbitration, his
or her decision generally will stand ―regardless of a court‘s view of its (de)merits.‖
(Oxford Health, supra, 569 U.S. at p. ___ [186 L.Ed.2d 113, 133 S.Ct. at p. 2068];
see 9 U.S.C. § 10.
In Green Tree, a plurality of the United States Supreme Court reasoned that
whether an arbitration agreement authorizes class arbitration does not fall into this
category of gateway questions of arbitrability because ―the question is not whether
the parties wanted a judge or an arbitrator to decide whether they agreed to
arbitrate a matter,‖ but ―what kind of arbitration proceeding the parties agreed
to.‖ (Green Tree, supra, 539 U.S. at p. 452.) This view did not garner a majority,
3
as the high court has since emphasized. (See Stolt-Nielsen, supra, 559 U.S. at
pp. 678–679, 680; accord, Oxford Health, supra, 569 U.S. at p. ___, fn. 2 [186
L.Ed.2d at p. 119, fn. 2, 133 S.Ct. at p. 2068, fn. 2].) And although the United
States Supreme Court has not had occasion to revisit the question of who decides
classwide arbitrability, subsequent decisions of the court have undermined Green
Tree‘s premise that questions of classwide arbitrability merely concern the
― ‗procedural mode‘ ‖ available for the presentation of the plaintiff‘s claims.
(Stolt-Nielsen, supra, 559 U.S. at p. 687.
In Stolt-Nielsen, the court considered whether an arbitration panel erred in
ordering class arbitration when the parties‘ agreement was ― ‗silent‘ ‖ on the
question and the parties had stipulated that they had never reached an agreement
on the issue. (Stolt-Nielsen, supra, 559 U.S. at pp. 666, 668–669.) Answering that
question in the affirmative, the court rejected the arbitration panel‘s class
arbitration decision as ―fundamentally at war with the foundational FAA principle
that arbitration is a matter of consent.‖ (Id. at p. 684.) The court acknowledged
that, ―[i]n certain contexts, it is appropriate to presume that parties that enter into
an arbitration agreement implicitly authorize the arbitrator to adopt such
procedures as are necessary to give effect to the parties‘ agreement. [Such] . . .
‗ ― ‗procedural‘ questions . . . grow out of the dispute and bear on its final
disposition‖ [and] are presumptively not for the judge, but for an arbitrator, to
decide.‘ ‖ (Id. at pp. 684–685, quoting Howsam, supra, 537 U.S. at p. 84.) But
classwide arbitrability, the court concluded, does not fall within that category
―because class-action arbitration changes the nature of arbitration to such a degree
that it cannot be presumed the parties consented to it by simply agreeing to submit
their disputes to an arbitrator.‖ (Stolt-Nielsen, at p. 685.
The court described the ―fundamental‖ differences between bilateral and
class arbitration — and has later expounded on them — in two ways that are
4
particularly relevant here. (Stolt-Nielsen, supra, 559 U.S. at p. 686.) First, as the
court described it, the switch from bilateral to class arbitration is one that strikes at
the heart of the bargain the parties make when they agree to ―forgo the procedural
rigor and appellate review of the courts‖ in favor of the ―lower costs‖ and ―greater
efficiency‖ of private dispute resolution. (Id. at p. 685.) For one thing, the court
pointed out, class arbitration dramatically increases the risks to defendants: ―[T]he
commercial stakes of class-action arbitration are comparable to those of class
action litigation, [citation], even though the scope of judicial review is much more
limited, [citation].‖ (Id. at pp. 686–687.) And for another, as the court later
elaborated in Concepcion, ―the switch from bilateral to class arbitration sacrifices
the principal advantage of arbitration — its informality — and makes the process
slower, more costly, and more likely to generate procedural morass than final
judgment.‖ (Concepcion, supra, 563 U.S. at p. 348; see 14 Penn Plaza LLC v.
Pyett (2009) 556 U.S. 247, 269 [―[T]he relative informality of arbitration is one of
the chief reasons that parties select arbitration.‖].) Thus, ―the relative benefits of
class-action arbitration are much less assured, giving reason to doubt the parties‘
mutual consent to resolve disputes through class[] arbitration.‖ (Id. at pp. 685–
686.) In support of the point, the court made express reference to its ―questions of
arbitrability‖ jurisprudence, citing First Options for the proposition that ― ‗one can
understand why courts might hesitate to interpret silence or ambiguity on the ―who
should decide arbitrability‖ point as giving the arbitrators that power, for doing so
might too often force unwilling parties to arbitrate‘ contrary to their expectations.‖
(Id. at p. 686, quoting First Options, supra, 514 U.S. at p. 945.
Second, the high court noted, the switch from bilateral to class adjudication
based on the parties‘ agreement necessarily calls into question which parties,
precisely, are involved, since ―[t]he arbitrator‘s award no longer purports to bind
just the parties to a single arbitration agreement, but adjudicates the rights of
5
absent parties as well.‖ (Stolt-Nielsen, supra, 559 U.S. at p. 686.) Stated
differently, the classwide arbitrability decision does not merely concern the
procedural mode for presentation of plaintiff’s claims, but whether the claims of
other, absent plaintiffs, may be arbitrated as well. In that fashion, the question
touches on the basic principle that parties must be permitted to specify not only
what issues they will arbitrate, but ―with whom‖ they will do so. (Id. at p. 683.
For these reasons, among others, the court in Stolt-Nielsen rejected the idea
that the availability of class arbitration is purely a matter of procedure. If that
were so, the court explained, ―there would be no need to consider the parties‘
intent with respect to class arbitration‖ because procedural questions of that sort
are ―committ[ed] . . . presumptively to the arbitrator‘s discretion.‖ (Stolt-Nielsen,
supra, 559 U.S. at p. 687, citing Howsam, supra, 537 U.S. at p. 84.) But, in the
court‘s estimation, ―the differences between bilateral and class-action arbitration
are too great for arbitrators to presume, consistent with their limited powers under
the FAA, that the parties‘ mere silence on the issue of class-action arbitration
constitutes consent to resolve their disputes in class proceedings.‖ (Stolt-Nielsen,
at p. 687, fn. omitted.
Later, in Concepcion, the court cited much the same set of considerations in
holding that ―the FAA prohibits States from conditioning the enforceability of
certain arbitration agreements on the availability of class[] arbitration procedures.‖
(Concepcion, supra, 563 U.S. at p. 336.) Class arbitration, the court reasoned,
necessarily results in slower dispositions and higher costs. (Id. at p. 348.
Moreover, because class arbitration implicates the rights of absent parties, due
process ―requires procedural formality.‖ (Id. at p. 349 [―For a class-action money
judgment to bind absentees in litigation, class representatives must at all times
adequately represent absent class members, and absent members must be afforded
notice, an opportunity to be heard, and a right to opt out of the class. [Citation.]
6
At least this amount of process would presumably be required for absent parties to
be bound by the results of arbitration.‖].) The court thought it ―unlikely‖ that in
passing the FAA in 1925 Congress meant to entrust arbitrators ―with ensuring that
third parties‘ due process rights are satisfied,‖ particularly since ―class arbitration
is a ‗relatively recent development.‘ ‖ (Id. at pp. 349–350.) And finally, the court
reiterated that ―class arbitration greatly increases risks to defendants. . . . The
absence of multilayered review makes it more likely that errors will go
uncorrected. Defendants are willing to accept the costs of these errors in
[classical] arbitration, since their impact is limited to the size of individual
disputes, and presumably outweighed by savings from avoiding the courts. But
when damages allegedly owed to tens of thousands of potential claimants are
aggregated and decided at once, the risk of an error will often become
unacceptable.‖ (Id. at p. 350.) The court concluded: ―We find it hard to believe
that defendants would bet the company with no effective means of review, and
even harder to believe that Congress would have intended to allow state courts to
force such a decision.‖ (Id. at p. 351, fn. omitted.
None of this, to be sure, amounts to a holding that the availability of class
arbitration is presumptively a decision for a court, rather than an arbitrator. As the
majority correctly notes (maj. opn., ante, at p. 28), that particular question was not
before the court in Stolt-Nielsen, since the parties in that case had expressly
assigned the determination to the arbitration panel (see Stolt-Nielsen, supra, 559
U.S. at p. 680). And certainly no such question was before the court in
Concepcion, in which the parties‘ agreement expressly disallowed class
arbitration. (Concepcion, supra, 563 U.S. at p. 336.) But the import of the
decisions seems fairly inescapable. If, because of the fundamental differences
between bilateral and class arbitration, the court is unwilling to treat classwide
arbitrability as a mere procedural matter — and thus unwilling to presume that
7
parties‘ ―silence on the issue of class-action arbitration constitutes consent to
resolve their disputes in class proceedings‖ (Stolt-Nielsen, 559 U.S. at p. 687, fn.
omitted) — it seems rather unlikely that the court would be willing to presume that
the parties have consented to allow an arbitrator to make an essentially
unreviewable determination to the same effect. That is particularly true because,
as the court has emphasized, the decision is one that does not affect the named
plaintiff and defendant alone, but implicates whether other, absent plaintiffs will
also be required to submit their claims to arbitration.
Given these recent developments in the high court‘s jurisprudence, it is
unsurprising that, at least to date, every federal court of appeals to consider the
issue on the merits has held that the availability of class arbitration is a question of
arbitrability for a court, rather than an arbitrator, ― ‗unless the parties clearly and
unmistakably provide otherwise.‘ ‖ (Dell Webb Communities, Inc. v. Carlson (4th
Cir. 2016) 817 F.3d 867, 873–877; Opalinski v. Robert Half Intern. (3d Cir. 2014
761 F.3d 326, 330, cert. denied (2015) ___U.S. ___ [191 L.Ed.2d 558, 135 S.Ct.
1530]; Reed Elsevier, supra, 734 F.3d at pp. 597–599; but cf. Robinson v. J & K
Admin. Mgmt. Servs., Inc. (5th Cir. 2016) 817 F.3d 193, 197 [acknowledging
Stolt-Nielsen, but concluding the panel was bound by the ―rule of orderliness‖ to
apply pre-Stolt-Nielsen circuit precedent following the plurality opinion in Green
Tree].) As these courts have explained, the high court‘s characterization of class
arbitration in Stolt-Nielsen and Concepcion is difficult to reconcile with a view
that would instead treat classwide arbitrability as simply a question of ―what kind
of . . . proceeding‖ the parties have agreed to. (Green Tree, supra, 539 U.S. at
p. 452, italics omitted; see maj. opn., ante, at p. 17.
The majority criticizes these decisions for confusing two separate issues:
the importance of the classwide arbitrability question, on the one hand, with the
parties‘ expectations about who will resolve it, on the other. (Maj. opn., ante, at
8
pp. 21-22.) The majority is correct, of course, that not every question that is
―important‖ to the parties is necessarily a gateway question that is presumptively
reserved for judicial determination. So, for example, in the First Circuit case on
which the majority relies, the parties may have cared very much indeed about
whether the claim at issue was time-barred under applicable arbitration rules, but
the caring alone does not render the interpretation of the time limit rule a question
of arbitrability for the court to decide. (PaineWebber Inc. v. Elahi (1st Cir. 1996
87 F.3d 589, 599; accord, Howsam, supra, 537 U.S. at p. 85.) But Stolt-Nielsen
rests on the premise that classwide arbitrability is a qualitatively different kind of
question from a question about the proper interpretation of a timing rule because it
so radically changes the nature of the bargain the parties strike when they agree to
submit their disputes to arbitration. If, as the high court says, the nature of these
changes ―giv[es] reason to doubt the parties‘ mutual consent to resolve disputes
through class[] arbitration‖ from their general agreement to arbitrate (Stolt-
Nielsen, supra, 559 U.S. at pp. 685–686), it is not much of a leap to conclude that
these changes also provide reason to doubt the parties‘ consent to permit an
arbitrator to decide, in his or her essentially unreviewable judgment, whether the
parties‘ silence or ambiguous contract language constitutes consent to class
arbitration.
The majority also dismisses the cases‘ concerns about permitting an
arbitrator to bring absent plaintiffs into the dispute, noting that ―[e]ven if an
arbitrator were to conclude class arbitration is permitted, the arbitration would
bring in only parties to the same form of arbitration agreement a court has already
determined to be valid, and the same type of dispute a court has already
determined to be within the scope of that agreement.‖ (Maj. opn., ante, at p. 25.
But as the majority elsewhere acknowledges, there is no requirement or guarantee
that a court will ever make such a determination. (Id. at pp. 9-10.) If the named
9
plaintiff chooses not to contest the validity of the agreement or its application to a
given dispute, then no court would have occasion to consider whether absent class
members had also given their consent to arbitrate. It may be, as the majority
suggests, that the answer is simply that arbitrators must provide absent plaintiffs
with an adequate opportunity to opt out, or the arbitral award will not be binding
on them. (Id. at p. 26; but see Oxford Health, supra, 569 U.S. at p. ___ [186
L.Ed.2d 113, 133 S.Ct. at p. 2071] (conc. opn. of Alito, J.) [arguing that an arbitral
award cannot be binding unless absent class members have been required to opt in,
since ― ‗[a]rbitration is simply a matter of contract between the parties,‘ [citation],
and an offeree‘s silence does not normally modify the terms of a contract
[citation].‖) But again, if the court thinks it ―unlikely‖ that the Congress that
enacted the FAA would have entrusted arbitrators with the protection of third
parties‘ due process rights (Concepcion, supra, 563 U.S. at p. 349), it is unclear
that the court would consider it any more likely that the parties would have
intended to assign to an arbitrator the determination whether class arbitration is
available. And in any event, the remedy for arbitral error — to permit collateral
attacks on the award — is one that, as Justice Alito has noted, may reinforce
doubts about the parties‘ likely intent at the time of contract formation. (See
Oxford Health, supra, 569 U.S. at p. ___ [186 L.Ed.2d 113, 133 S.Ct. at p. 2072]
(conc. opn. of Alito, J.) [―Class arbitrations that are vulnerable to collateral attack
allow absent class members to unfairly claim the ‗benefit from a favorable
judgment without subjecting themselves to the binding effect of an unfavorable
one,‘ [citation]. . . . [T]his possibility should give courts pause before concluding
that the availability of class arbitration is a question the arbitrator should
decide.‖].
10

II.
It may well be that further developments in the United States Supreme
Court will shed new light on the issue before us. But unless and until the court
revisits the issue, I would follow where the court has led. Because the majority
today charts a different path, I must respectfully dissent.
KRUGER, J.
WE CONCUR:
CHIN, J.
CORRIGAN, J.

11
See next page for addresses and telephone numbers for counsel who argued in Supreme Court.
Name of Opinion Sandquist v. Lebo Automotive, Inc.

Unpublished Opinion

Original Appeal
Original Proceeding
Review Granted
XXX 228 Cal.App.4th 65
Rehearing Granted
Opinion No.
S220812
Date Filed: July 28, 2016

Court:
Superior
County: Los Angeles
Judge: Elihu Berle

Counsel:
Sanford Heisler Kimpel, Janette Wipper, Felicia Medina; Public Justice and F. Paul Bland, Jr., for Plaintiff
and Appellant.
Arbogast Law, David M. Arbogast; The Bronson Firm and Steven M. Bronson for Consumer Attorneys of
California as Amicus Curiae on behalf of Plaintiff and Appellant.
Capstone Law, Glenn A. Danas; Public Citizen Litigation Group and Scott T. Nelson for Public Citizen,
Inc., as Amicus Curiae on behalf of Plaintiff and Appellant.
Fisher & Phillips, James J. McDonald, Jr., Grace Y. Horoupian, Jimmie E. Johnson and Wendy McGuire
Coats for Defendants and Respondents.

Holland & Knight, James W. Michalski and Jerrold J. Ganzfried for Dri-the Voice of the Defense Bar and
the Association of Southern California Defense Counsel as Amici Curiae on behalf of Defendants and
Respondents.



Counsel who argued in Supreme Court (not intended for publication with opinion):
F. Paul Bland, Jr.
Public Justice
1825 K Street, NW, Suite 200
Washington, D.C. 20006
(202) 797-8600
Wendy McGuire Coats
Fisher & Phillips
One Embarcadero Center, Suite 2050
San Francisco, CA 94111
(415) 490-9000

2
Opinion Information
Date:Docket Number:
Thu, 07/28/2016S220812

Parties
1Timothy Sandquist (Plaintiff and Appellant)
Represented by Felicia Maria Medina
Sanford Heisler Kimpel LLP
111 Sutter Street, Suite 975
San Francisco, CA

2Timothy Sandquist (Plaintiff and Appellant)
Represented by Janette Wipper
Sanford Heisler Kimpel LLP
111 Sutter Street, Suite 975
San Francisco, CA

3Timothy Sandquist (Plaintiff and Appellant)
Represented by F. Paul Bland
Public Justice PC
1825 K Street, North West, Suite 200
Washington, DC

4Lebo Automotive, Inc. (Defendant and Respondent)
Represented by James J. McDonald
Fisher and Phillips LLP
2050 Main Street, Suite 1000
Irvine, CA

5Lebo Automotive, Inc. (Defendant and Respondent)
Represented by Grace Y. Horoupian
Fisher and Phillips LLP
2050 Main Street, Suite 1000
Irvine, CA

6Lebo Automotive, Inc. (Defendant and Respondent)
Represented by Jimmie Johnson
Fisher and Phillips LLP
2050 Main Street
Irvine, CA

7Lebo Automotive, Inc. (Defendant and Respondent)
Represented by Wendy McGuire Coats
Fisher and Phillips, LLP
2050 Main Street, Suite 1000
Irvine, CA

8John Elway (Defendant and Respondent)
Represented by James J. McDonald
Fisher and Phillips LLP
2050 Main Street, Suite 1000
Irvine, CA

9John Elway (Defendant and Respondent)
Represented by Grace Y. Horoupian
Fisher and Phillips LLP
2050 Main Street, Suite 1000
Irvine, CA

10John Elway (Defendant and Respondent)
Represented by Jimmie Johnson
Fisher and Phillips LLP
2050 Main Street
Irvine, CA

11John Elway (Defendant and Respondent)
Represented by Wendy McGuire Coats
Fisher and Philips, LLP
2050 Main Street, Suite 1000
Irvine, CA

12Mitchell D. Pierce (Defendant and Respondent)
Represented by James J. McDonald
Fisher and Phillips LLP
2050 Main Street, Suite 1000
Irvine, CA

13Mitchell D. Pierce (Defendant and Respondent)
Represented by Grace Y. Horoupian
Fisher and Phillips LLP
2050 Main Street, Suite 1000
Irvine, CA

14Mitchell D. Pierce (Defendant and Respondent)
Represented by Jimmie Johnson
Fisher and Phillips LLP
2050 Main Street
Irvine, CA

15Mitchell D. Pierce (Defendant and Respondent)
Represented by Wendy McGuire Coats
Fisher and Phillips, LLP
2050 M ain Street, Suite 1000
Irvine, CA

16Jerry L. Williams (Defendant and Respondent)
Represented by James J. McDonald
Fisher and Phillips LLP
2050 Main Street, Suite 1000
Irvine, CA

17Jerry L. Williams (Defendant and Respondent)
Represented by Grace Y. Horoupian
Fisher and Phillips LLP
2050 Main Street, Suite 1000
Irvine, CA

18Jerry L. Williams (Defendant and Respondent)
Represented by Jimmie Johnson
Fisher and Phillips LLP
2050 Main Street
Irvine, CA

19Jerry L. Williams (Defendant and Respondent)
Represented by Wendy McGuire Coats
Fisher and Phillips, LLP
2050 Main Street, Suite 1000
Irvine, CA

20Darrell Sperber (Defendant and Respondent)
Represented by James J. McDonald
Fisher and Phillips LLP
2050 Main Street, Suite 1000
Irvine, CA

21Darrell Sperber (Defendant and Respondent)
Represented by Grace Y. Horoupian
Fisher and Phillips LLP
2050 Main Street, Suite 1000
Irvine, CA

22Darrell Sperber (Defendant and Respondent)
Represented by Jimmie Johnson
Fisher and Phillips
2050 Main Street
Irvine, CA

23Darrell Sperber (Defendant and Respondent)
Represented by Wendy McGuire Coats
Fisher and Phillips, LLP
2050 Main Street, Suite 1000
Irvine, CA

24National Association of Consumer Advocates (Pub/Depublication Requestor)
Represented by James C. Sturdevant
The Sturdevant Law Firm
354 Pine Street 4th Floor
San Francisco, CA

25Sturdevant Law Firm (Pub/Depublication Requestor)
Represented by James C. Sturdevant
Sturdevant Law Firm
354 Pine Street 4th Floor
San Francisco, CA

26DRI-The Voice of the Defense Bar (Amicus curiae)
Represented by James W. Michalski
Riordan & McKinzie
400 South Hope Street, 8th Floor
Los Angeles, CA

27DRI-The Voice of the Defense Bar (Amicus curiae)
Represented by Jerrold J. Ganzfried
Holland & Knight LLP
800 17th Street, NW, Suite 1100
Washington, DC

28Association of South California Defense Counsel (Amicus curiae)
Represented by James W. Michalski
Riordan & McKinzie
400 South Hope Street, 8th Floor
Los Angeles, CA

29Association of South California Defense Counsel (Amicus curiae)
Represented by Jerrold J. Ganzfried
Holland & Knight LLP
800 17th Street, NW, Suite 1100
Washington, DC

30Public Citizen Inc. (Amicus curiae)
Represented by Glenn A Danas
Capstone Law APC
1840 Century Park East, Suite 450
Los Angeles, CA

31Consumer Attorneys of California (Pub/Depublication Requestor)
Represented by David Mills Arbogast
Arbogast Law
8117 West Manchester Avenue, Suite 530
Playa Del Rey, CA

32Consumer Attorneys of California (Pub/Depublication Requestor)
Represented by Steven Michael Bronson
Bronson Firm APC
350 10th Avenue, Suite 880
San Diego, CA


Disposition
Jul 28 2016Opinion: Affirmed

Dockets
Aug 27 2014Petition for review filed
Defendant and Respondent: Lebo Automotive, Inc.Attorney: James J. McDonald Defendant and Respondent: John ElwayAttorney: James J. McDonald Defendant and Respondent: Mitchell D. PierceAttorney: James J. McDonald Defendant and Respondent: Jerry L. WilliamsAttorney: James J. McDonald Defendant and Respondent: Darrell SperberAttorney: James J. McDonald
Aug 27 2014Record requested
Sep 3 2014Received Court of Appeal record
one doghouse (volume 1 of 2)
Sep 17 2014Answer to petition for review filed
Plaintiff and Appellant: Timothy SandquistAttorney: Felicia Maria Medina pursuant to CRC, rule 8.25(b)
Sep 29 2014Reply to answer to petition filed
Defendant and Respondent: Lebo Automotive, Inc.Attorney: James J. McDonald Defendant and Respondent: John ElwayAttorney: James J. McDonald Defendant and Respondent: Mitchell D. PierceAttorney: James J. McDonald Defendant and Respondent: Jerry L. WilliamsAttorney: James J. McDonald Defendant and Respondent: Darrell SperberAttorney: James J. McDonald
Sep 29 2014Request for judicial notice filed
Defendant and Respondent: Lebo Automotive, Inc.Attorney: James J. McDonald Defendant and Respondent: John ElwayAttorney: James J. McDonald Defendant and Respondent: Mitchell D. PierceAttorney: James J. McDonald Defendant and Respondent: Jerry L. WilliamsAttorney: James J. McDonald Defendant and Respondent: Darrell SperberAttorney: James J. McDonald
Oct 14 2014Received:
Supplemental AuthoritiesLebo Automotive, Inc., Defendant and Respondent Jimmie E. Johnson, Retained counsel John Elway, Defendant and Respondent Jimmie E. Johnson, Retained counsel Mitchell D. Pierce, Defendant and Respondent Jimmie E. Johnson, Retained counsel Jerry L. Williams, Defendant and Respondent Jimmie E. Johnson, Retained counsel Darrell Sperber, Defendant and Respondent Jimmie E. Johnson, Retained counsel
Oct 16 2014Time extended to grant or deny review
The time for granting or denying review in the above-entitled matter is hereby extended to and including November 25, 2014, or the date upon which review is either granted or denied.
Nov 12 2014Petition for review granted
Votes: Cantil-Sakauye, C.J., Baxter, Werdegar, Chin, Corrigan and Liu, JJ.
Nov 12 2014Letter sent requesting certification of interested parties/entities
Nov 12 2014Additional record requested
Nov 17 2014Received additional record
one doghouse (volume 2 of 2)
Nov 24 2014Request for extension of time filed
Counsel for respondents requests extension to January 12, 2015 to file the opening brief on the merits.
Nov 26 2014Certification of interested entities or persons filed
James J. McDonald, Retained counsel for respondents
Dec 2 2014Certification of interested entities or persons filed
counsel for appellant, Timothy Sandquist
Dec 10 2014Extension of time granted
On application of respondent and good cause appearing, it is ordered that the time to serve and file the opening brief on the merits is extended to and including January 12, 2015. No further extensions are contemplated.
Jan 12 2015Opening brief on the merits filed
Defendant and Respondent: Lebo Automotive, Inc.Attorney: James J. McDonald Defendant and Respondent: John ElwayAttorney: James J. McDonald Defendant and Respondent: Mitchell D. PierceAttorney: James J. McDonald Defendant and Respondent: Jerry L. WilliamsAttorney: James J. McDonald Defendant and Respondent: Darrell SperberAttorney: James J. McDonald Opening brief on the merits filed.Due on 01/12/2015 By 31 Day(s)
Feb 2 2015Change of contact information filed for:
Felicia Medina, counsel for Appellant.
Feb 2 2015Request for extension of time filed
by Felicia Medina, counsel for appellant, requesting an extension to March 13, 2015, to file answer brief on the merits.
Feb 9 2015Extension of time granted
On application of appellant and good cause appearing, it is ordered that the time to serve and file the answer brief on the merits is extended to and including March 13, 2015. No further extensions of time are contemplated.
Mar 16 2015Answer brief on the merits filed
Plaintiff and Appellant: Timothy SandquistAttorney: Felicia Maria Medina Answer brief on the merits filed.Due on 03/13/2015 By 30 Day(s) Pursuant to CRC, rule 8.25(b)
Mar 18 2015Received:
Notice of Errata regarding answer brief on the merits Timothy Sandquist, Plaintiff and Appellant Felicia Maria Medina, Retained counsel
Apr 2 2015Reply brief filed (case fully briefed)
Defendant and Respondent: Lebo Automotive, Inc.Attorney: James J. McDonald Defendant and Respondent: John ElwayAttorney: James J. McDonald Defendant and Respondent: Mitchell D. PierceAttorney: James J. McDonald Defendant and Respondent: Jerry L. WilliamsAttorney: James J. McDonald Defendant and Respondent: Darrell SperberAttorney: James J. McDonald
May 4 2015Application to file amicus curiae brief filed
By DRI- The Voice of the Defense Bar and The Association of Southern California Defense Counsel in support of appellants.
May 5 2015Permission to file amicus curiae brief granted
The application of DRI-The Voice of the Defense Bar and The Association of Southern California Defense Counsel for permission to file an amicus curiae brief in support of respondents is hereby granted. (See Cal. Rules of Court, rule 8.520(f).)
May 5 2015Amicus curiae brief filed
Amicus curiae: DRI-The Voice of the Defense BarAttorney: James W. Michalski Attorney: Jerrold J. Ganzfried Amicus curiae: Association of South California Defense CounselAttorney: James W. Michalski Attorney: Jerrold J. Ganzfried filed with permission.
May 5 2015Application to file amicus curiae brief filed
by David Arbogast, counsel for Consumer Attorneys of California requesting to file amicus brief in support of appellant. (application contained within brief)
May 6 2015Application to file amicus curiae brief filed
by Glenn A. Danas, counsel for Public Citizen Inc., in support of appellant. (application contained within brief) Pursuant to CRC, rule 8.25(b)
May 7 2015Permission to file amicus curiae brief granted
The application of Consumer Attorneys of California for permission to file an amicus curiae brief in support of appellant is hereby granted. (See Cal. Rules of Court, rule 8.520(f).)
May 7 2015Amicus curiae brief filed
Pub/Depublication Requestor: Consumer Attorneys of CaliforniaAttorney: David Mills Arbogast
May 12 2015Permission to file amicus curiae brief granted
The application of Public Citizen Inc. for permission to file an amicus curiae brief in support of appellant is hereby granted. (See Cal. Rules of Court, rule 8.520(f).)
May 12 2015Amicus curiae brief filed
Amicus curiae: Public Citizen Inc.Attorney: Glenn A Danas
Jun 10 2015Request for extension of time filed
Appellant's counsel is requesting an extension to June 26, 2015 to file the answer to the amicus curiae brief of DRI-The Voice of the Defense Bar and The Association of Southern California Defense Counsel. By counsel Felicia Medina.
Jun 15 2015Extension of time granted
On application of appellant and good cause appearing, it is ordered that the time to serve and file the answer to amicus curiae brief of DRI-The Voice of the Defense Bar and The Association of Southern California Defense Counsel is extended to and including June 26, 2015.
Jun 29 2015Response to amicus curiae brief filed
Plaintiff and Appellant: Timothy SandquistAttorney: Felicia Maria Medina Response to amicus curiae brief filed.Due on 06/26/2015 By 15 Day(s) To amicus curiae brief of DRI-The Voice of the Defense Bar and The Association of Southern California Defense Counselpursuant to CRC, rule 8.25(b)
Aug 26 2015Change of contact information filed for:
Timothy Sandquist, Plaintiff and Appellant Felicia Maria Medina, Retained counsel
Apr 1 2016Case ordered on calendar
to be argued on Tuesday, May 3, 2016, at 9:00 a.m., in San Francisco.
Apr 8 2016Note: Mail returned (unable to forward)
Oral argument calendar filed April 1, 2016, sent to James Sturdevant, counsel for Sturdevant Law School. "Return to Sender"
Apr 26 2016Received:
Additional Authorities Timothy Sandquist, Plaintiff and Appellant Felicia Maria Medina, Retained counsel
Apr 27 2016Request for judicial notice denied
The request for judicial notice, filed on September 29, 2014, is denied.
Apr 27 2016Received:
Additional Authorities By Wendy McGuire Coats, counsel for respondents
May 3 2016Cause argued and submitted
Jul 27 2016Notice of forthcoming opinion posted
To be filed on Thursday, July 28, 2016 at 10:00 a.m.
Jul 28 2016Opinion filed: Judgment affirmed in full
For the foregoing reasons, we affirm the Court of Appeal. Majority Opinion by Werdegar, J. -- joined by Cantil-Sakauye, C. J., Liu, Cuéllar, JJ. Dissenting Opinion by Kruger, J. -- joined by Chin, Corrigan, JJ.

Briefs
Apr 2 2015Reply brief filed (case fully briefed)
Defendant and Respondent: Lebo Automotive, Inc.Attorney: James J. McDonald Defendant and Respondent: John ElwayAttorney: James J. McDonald Defendant and Respondent: Mitchell D. PierceAttorney: James J. McDonald Defendant and Respondent: Jerry L. WilliamsAttorney: James J. McDonald Defendant and Respondent: Darrell SperberAttorney: James J. McDonald
May 12 2015Amicus curiae brief filed
Amicus curiae: Public Citizen Inc.Attorney: Glenn A Danas
May 7 2015Amicus curiae brief filed
Pub/Depublication Requestor: Consumer Attorneys of CaliforniaAttorney: David Mills Arbogast
May 5 2015Amicus curiae brief filed
Amicus curiae: DRI-The Voice of the Defense BarAttorney: James W. Michalski Attorney: Jerrold J. Ganzfried Amicus curiae: Association of South California Defense CounselAttorney: James W. Michalski Attorney: Jerrold J. Ganzfried
Mar 16 2015Answer brief on the merits filed
Plaintiff and Appellant: Timothy SandquistAttorney: Felicia Maria Medina
Jun 29 2015Response to amicus curiae brief filed
Plaintiff and Appellant: Timothy SandquistAttorney: Felicia Maria Medina
Jan 12 2015Opening brief on the merits filed
Defendant and Respondent: Lebo Automotive, Inc.Attorney: James J. McDonald Defendant and Respondent: John ElwayAttorney: James J. McDonald Defendant and Respondent: Mitchell D. PierceAttorney: James J. McDonald Defendant and Respondent: Jerry L. WilliamsAttorney: James J. McDonald Defendant and Respondent: Darrell SperberAttorney: James J. McDonald
Jun 29 2015Response to amicus curiae brief filed
Plaintiff and Appellant: Timothy SandquistAttorney: Felicia Maria Medina
If you'd like to submit a brief document to be included for this opinion, please submit an e-mail to the SCOCAL website