New 9th Circ. Rulings May Restrict Mcgill Rule's Scope

In the 2017 McGill v. Citibank NA decision, the California Supreme Court held that any arbitration clause that bars a plaintiff from seeking public injunctive relief in any forum is unenforceable.

The so-called McGill rule has become a central feature of the California arbitration landscape, and parties have vigorously litigated its validity and scope.

One of the first key challenges to the McGill rule came in the form of a preemption challenge. A number of entities facing McGill rule challenges argued that the rule was preempted by the Federal Arbitration Act.

However, two recent Ninth Circuit decisions that interpret the McGill rule once again raise the possibility of federal preemption, and of new paths for seeking U.S. Supreme Court review.

Originally published in Law360; reprinted with permission.