Chamber of Commerce v. Bonta, 2023 WL 2013326 (9th Cir. 2023)

A Ninth Circuit panel struck down California’s AB 51 (aka the Request Arbitration, Go to Jail Law). The law imposed civil and criminal penalties on employers that required employees to sign arbitration agreements. The same panel previously held that the Federal Arbitration Act (FAA) preempted much of the law but declined to strike down AB 51’s penalties for employers who had failed to get an employee to sign. In dissent, Judge Ikuta eviscerated the majority’s “torturous ruling” which, she said, was analogous to a statute making it unlawful for a drug dealer to attempt to sell drugs, but lawful if the drug dealer had succeeded in the transaction. However, after Viking River Cruises, Inc. v. Moriana, 142 S. Ct. 1906 (2022), the panel voted to rehear the case and Judge Fletcher switched sides. Now writing for the majority, Judge Ikuta noted that AB 51 singled out arbitration agreements in violation of the FAA and that non-negotiable agreements (like arbitration agreements) are routine and lawful.