In its Orders released this morning (www.supremecourt.gov/orders/courtorders/022414zor_19m2.pdf), the U.S. Supreme Court vacated the decision of the Second Appellate District of the Court of Appeal of California inCarmax Auto Superstores v. Fowler applying the so-called Gentry rule relating to class action waivers in arbitration agreements, and remanded the case back to the California state appellate court for further consideration in light of American Express Co. v. Italian Colors Restaurant.

 

As posed by petitioner Carmax, the issue in the Carmax certiorari petition was “Whether California’s “Gentry rule” – under which class-action waivers in employment arbitration agreements are invalid if “a class arbitration is likely to be a significantly more effective practical means of vindicating the rights of the affected employees than individual litigation or arbitration,” Gentry v. Superior Court of L.A. County, is preempted by the Federal Arbitration Act in light of this Court’s decisions in AT&T Mobility LLC v. Concepcion and American Express Co. v. Italian Colors Restaurant.”

 

The California Second Appellate District had determined in Carmax that California’s Gentry rule survived the U.S. Supreme Court’s  2010 decision in Concepcion.  The Carmax appellate decision was issued March 26, 2013, about three months before the U.S. Supreme Court ruled in Amex v. Italian Colors, but the denial of further review by the California Supreme Court in Carmax came in July 2013, a month after the Amex v. Italian Colors ruling.

 

So, the U.S. Supreme Court is giving the California state courts another chance here to take the Amex v. Italian Colors decision into account.

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Tags: Carmax, Court of Appeal of California inCarmax Auto Superstores, U.S. Supreme Court