I'm surprised that the Court wasn't able to get Justices Corrigan and Jenkins on board for this one.
The majority opinion goes out of its way to strike a middle ground. The issue is whether the Federal Arbitration Act preempts Section 1281.98 of the CCP, which provides that defendants in employment and consumer cases waive their right to arbitrate if they don't timely pay the arbitration fees that are due. The majority holds that it's not preempted, but simultaneously limits the statute to cases in which the failure to pay arbitration fees was wilful, grossly negligent, or fraudulent. This overrules a slew of Court of Appeal cases holding that the statute means what is says and that even accidental failures to timely pay arbitration fees results in a waiver of the right to arbitrate.
Given the language -- and, I believe, the intent -- of Section 1281.98, there's a strong argument that those Court of Appeal holdings were correct. Though Justice Liu's majority opinion does a decent job of making the contrary argument. (Which, of course, is now the law.)
Regardless, I would have thought that substantially narrowing the scope of Section 1281.98 would have been enough to get everyone on board for the anti-preemption holding. Apparently not. Justices Corrigan and Jenkins still believe that Section 1281.98 is preempted. So be it.
Analyzing the practical realities more deeply, maybe narrowing the reach of Section 1281.98 was (also?) an attempt to insulate the opinion from reversal by the United States Supreme Court. We'll see how that plays out in the end as well.
In any event, for now, the rule is a lot more favorable to nonpaying arbitration defendants than it was 24 hours ago. Section 1281.98 is going to apply in a ton fewer cases going forward.
