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Hastings Law Journal

Abstract

California is one of the largest economies in the world. It is home to many of the most successful companies in all sectors, especially health and technology. In recent years arbitration agreements, which have already been around for almost 100 years, have become boilerplate in most agreements with large California-headquartered companies. The United States Supreme Court continues to issue decisions in support of arbitration, most recently in DIRECTV, Inc. v. Imburgia. The courts in California, however, have counterintuitively stayed on the side of consumers by repeatedly denying enforcement of arbitration clauses, which forces their companies to go to more friendly jurisdictions, such as New York. This Note looks at the history of the Federal Arbitration Act and major U.S. Supreme Court opinions in support of arbitration. That federal support will then be compared to California courts’ hesitance to support arbitration and the resulting disagreements between the Supreme Court and California courts. New York law is used to illustrate what an “arbitration-friendly” jurisdiction looks like and what changes California would need to make in order to make it easier for companies to locate their arbitration proceedings in California.

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