FAA Preempts California Rule Barring Arbitration of Certain Claims for Injunctive Relief, Federal Court Rules

The Federal Arbitration Act (“FAA”) preempted the California Supreme Court’s rule exempting claims for “public injunctive relief” from arbitration (known as the “Broughton-Cruz” rule), the U.S. Court of Appeals for the Ninth Circuit has ruled, reversing an order denying arbitration. Ferguson v. Corinthian Colleges, Inc. et al., No. 11-56965 (9th Cir. Oct. 28, 2013). The Court found the Broughton-Cruz rule was “clearly irreconcilable” with the U.S. Supreme Court’s recent decisions on the FAA. The Ninth Circuit returned the case to the district court, directing it to order arbitration.