Kilgore v. Key Bank: Ninth Circuit Grants En Banc Review of Holding That FAA Preempts California's Broughton-Cruz Rule In Public Injunction Cases

In Kilgore v. KeyBank, N.A., 673 F.3d 947 (3/7/12) (discussed here), a three-judge panel of the Ninth Circuit Court of Appeals held that the Federal Arbitration Act ("FAA") preempts California's Broughton-Cruz rule, which prohibits the arbitration of claims for broad, public injunctive relief. See Broughton v. Cigna Healthplans of California (1999) 21 Cal.4th 1066 (prohibition on compelling arbitration in public injunctive relief cases under the Consumer Legal Remedies Act); Cruz v. PacifiCare Health Systems, Inc. (2003) 30 Cal.4th 303 (prohibition on compelling arbitration in public injunctive relief cases under the Unfair Competition Law). The plaintiffs in Kilgore are student loan borrowers who filed a putative class action against lenders seeking to enjoin them from collecting loans or reporting loan balances to credit reporting agencies.

On Friday, the Ninth Circuit granted the plaintiffs' petition for en banc review of the decision. The Court's order is available here. The docket is available through the PACER system here. Kilgore is Case No. 09-16703. 

I have added Kilgore to our Watch List of important pending cases.