In Sandquist v. Lebo Automotive, ___ Cal.App.4th ___  (July 22, 2014), the California Court of Appeal (Second Appellate District, Division Seven) reversed the order of the Los Angeles County Superior Court (Judge Berle) dismissing plaintiff’s class claims, as the issue should have been decided by the arbitrator.

Plaintiff was an automobile salesperson who, when he was hired, unwittingly signed three documents which required him to submit to arbitration any employment-related disputes he might have with defendant company.  None of these documents specifically stated whether class action claims also would be subject to arbitration.  Over eleven years later, after Plaintiff was forced to resign from his employment, he filed a class action complaint against defendant in Superior Court for, among other claims, race discrimination.  Subsequently, defendant filed a motion to compel arbitration, which the trial court granted.  In doing so, the trial court determined that the agreement to arbitrate was not unconscionable.  The court then stated that it was also going to dismiss the class allegations because there was no basis to compel class arbitration, since plaintiff’s claims had to be individual arbitrated and there would no longer be any representative in the lawsuit who could adequately represent the purported class.  Accordingly, the court gave plaintiff sixty days to find another class representative.  When Plaintiff failed to do so, the court dismissed the class claims with prejudice. Plaintiff appealed.

The court of appeal reversed, concluding that the question of whether plaintiff agreed to class arbitration was for the arbitrator, rather than the court, to decide. Although the court noted that the question of arbitrability generally was an issue for the court to decide, there is a split in authority when the arbitration agreement is silent on the issue of class arbitration. The court went on to state that it agreed “with the majority of cases that follow the plurality opinion in [Green Tree Fin. Corp. v. Bazzle, 539 U.S. 444 (2003)] that the question whether the parties agreed to class arbitration in cases where the arbitration agreement is silent is determined by the arbitrator. Such a rule is particularly appropriate in light of the fact that a class action is a procedural device. As noted, a majority of the United States Supreme Court has stated that ‘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.’”