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Friday, November 2, 2012

Nelsen v. Legacy Partners: Supreme Court Denies Review of Arbitration Decision

In Nelsen v. Legacy Partners Residential, Inc. (7/18/12) 207 Cal.App.4th 1115 (discussed here) the plaintiff filed a putative class action alleging violations of California wage and hour laws and the UCL. The trial court granted the defendant's motion to compel individual arbitration and stayed the putative class action. The Court of Appeal affirmed, making the following points, among others:
  • Assuming (without deciding) that Gentry v. Superior Court (2007) 42 Cal.4th 443 is still good law after AT&T Mobility LLC v. Concepcion (2011) 563 U.S. ___, the plaintiff had not made the factual showing required by Gentry
  • The NLRB incorrectly decided D.R. Horton (discussed here), and in any case the NLRB likely did not apply to the plaintiff, who was an apartment manager; and 
  • Concepcion abrogates California's Broughton-Cruz rule that actions for public injunctive relief are not subject to arbitration. 
The California Supreme Court today announced its decision to deny review in Nelsen. This seems somewhat inconsistent with earlier decisions to grant or deny review. First, the Nelsen Court cited to Iskanian v. CLS Transportation Los Angeles, LLC (2012) 206 Cal.App.4th 949, review granted 9/19/12 (discussed here), to support its position that the NLRB incorrectly decided D.R. Horton. Second, the Court distinguished Hoover v. American Income Life Insurance Co. (2012) 206 Cal.App.4th 1193, review denied 09/12/12 (discussed here) with regard to Broughton-Cruz.  

It is entirely possible that the Supreme Court agrees with the Nelsen Court's positions on these issues, in other words that D.R. Horton is wrong and that Hoover is distinguishable on Broughton-Cruz for the reasons stated in Nelsen.  On the other hand, it is also possible, as I have suggested before, that the Supreme Court is lacking direction in employment law cases since the departure of Justices George and Moreno. However, if that were the case, I would have expected the Court to grant review in a case like Nelsen while they figured out where they're headed in this area of law.  

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