Opposition Brief — HRB Tax Group, Inc., et al., Petitioners v. Derek Snarr

No. 20-1570

IN THE

Supreme Court of the United States

HRB TAX GROUP, INC., ET AL.,

v.

Petitioners,

DEREK SNARR,

Respondent.

On Petition for a Writ of Certiorari to the

United States Court of Appeals for the Ninth Circuit

RESPONDENT’S BRIEF IN OPPOSITION

SETH A. SAFIER

ADAM J. GUTRIDE

GUTRIDE SAFIER LLP

100 Pine Street

Suite 1250

San Francisco, CA

(415) 639-9090

MATTHEW T. MCCRARY

GUTRIDE SAFIER LLP

4450 Arapahoe Avenue

Suite 100

Boulder, CO 80303

(415) 639-9090

SCOTT L. NELSON

Counsel of Record

ALLISON M. ZIEVE

PUBLIC CITIZEN

LITIGATION GROUP

1600 20th Street NW

Washington, DC 20009

(202) 588-1000

snelson@citizen.org

STEPHEN M. RAAB

GUTRIDE SAFIER LLP

305 Broadway, 7th Floor

New York, NY 10007

(415) 639-9090

Attorneys for Respondent

July 2021

i

QUESTION PRESENTED

Whether the Federal Arbitration Act preempts

California decisional law applying general principles

of contract law to hold that, when a party has a substantive statutory right to seek “public injunctive relief”—that is, injunctive relief obtained by an individual that benefits the public generally—contractual

agreements, including arbitration agreements, that

purport to forbid the plaintiff from seeking and obtaining such relief in any forum are invalid.

ii

RULE 14.1(b)(iii) STATEMENT

In addition to the proceedings listed in the petition, the following proceedings are directly related to

this case:

 Snarr v. HRB Tax Group, et al., No. 20-16001

(9th Cir., appeal docketed June 11, 2021)

iii

TABLE OF CONTENTS

QUESTION PRESENTED .......................................... i

RULE 14.1(b)(iii) STATEMENT ................................ ii

TABLE OF AUTHORITIES ...................................... iv

INTRODUCTION ....................................................... 1

STATEMENT .............................................................. 4

A. The McGill Rule ............................................... 4

B. The Blair decision ............................................ 6

C. This case ............................................................ 9

REASONS FOR DENYING THE WRIT .................. 12

I.

A single district court’s disagreement with Blair

does not justify review by this Court................. 12

II. This case is an unsuitable vehicle for addressing

the issue. ............................................................. 14

III. Blair was correctly decided. ............................... 16

A. This Court’s decisions do not permit

arbitration agreements to waive substantive

claims. ............................................................. 16

B. The McGill rule is consistent with the FAA’s

purposes and objectives. ................................ 21

IV. McGill and Blair do not “blow up” consumer

arbitration in California. ................................... 26

CONCLUSION.......................................................... 33

iv

TABLE OF AUTHORITIES

Cases

Page(s)

14 Penn Plaza LLC v. Pyett,

556 U.S. 247 (2009) ....................................... 16, 24

Aanderud v. Super. Ct.,

221 Cal. Rptr. 3d 225 (Cal. Ct. App. 2017) ......... 28

Allied-Bruce Terminix Cos. v. Dobson,

513 U.S. 265 (1995) ............................................. 20

Am. Express Co. v. Italian Colors Rest.,

570 U.S. 228 (2013) ....................................... 17, 24

Arthur Andersen LLP v. Carlisle,

556 U.S. 624 (2009) ............................................. 20

AT&T Mobility LLC v. Concepcion,

563 U.S. 333 (2011) ...................................... passim

Blair v. Rent-A-Center, Inc.,

928 F.3d 819 (9th Cir. 2019) ........................ passim

Booker v. Robert Half Int’l, Inc.,

413 F.3d 77 (D.C. Cir. 2005) ............................... 17

Broughton v. Cigna Healthplans,

988 P.2d 67 (Cal. 1999) ................................. 4, 5, 6

Buckeye Check Cashing, Inc. v. Cardegna,

546 U.S. 440 (2006) ............................................. 20

Camreta v. Greene,

563 U.S. 692 (2011) ............................................. 13

Colopy v. Uber Techs. Inc.,

2019 WL 6841218 (N.D. Cal. Dec. 16, 2019) ...... 30

Cruz v. PacifiCare Health Sys., Inc.,

66 P.3d 1157 (Cal. 2003) ............................... 4, 5, 6

v

DiCarlo v. MoneyLion, Inc.,

988 F.3d 1148 (9th Cir. 2021) ............................. 27

DIRECTV, Inc. v. Imburgia,

577 U.S. 47 (2015) ............................................... 20

Doctor’s Assocs., Inc. v. Casarotto,

517 U.S. 681 (1996) ............................................. 20

EEOC v. Waffle House, Inc.,

534 U.S. 279 (2002) ............................................. 16

Eiess v. USAA Fed. Sav. Bank,

404 F. Supp. 3d 1240 (N.D. Cal. 2019) ............... 28

Epic Sys. Corp. v. Lewis,

138 S. Ct. 1612 (2018) .................................. passim

F.C. Schaffer & Assocs. v. Demech Contractors, Ltd.,

101 F.3d 40 (5th Cir. 1996) ................................. 14

Ferguson v. Corinthian Colleges, Inc.,

733 F.3d 928 (9th Cir. 2013) ................................. 5

First Options of Chicago, Inc. v. Kaplan,

514 U.S. 938 (1995) ............................................. 14

Gilmer v. Interstate/Johnson Lane Corp.,

500 U.S. 20 (1991) ......................................... 16, 24

Gonzalez-Torres v. Zumper, Inc.,

2019 WL 6465283 (N.D. Cal. Dec. 2, 2019) ........ 27

Green Tree Fin. Corp.-Ala. v. Randolph,

531 U.S. 79 (2000) ............................................... 14

Greenley v. Avis Budget Group Inc.,

2020 WL 1493618

(S.D. Cal. Mar. 27, 2020) ..................................... 27

Kindred Nursing Ctrs. Ltd. P’ship v. Clark,

137 S. Ct. 1421 (2017) ....................7, 19, 20, 21, 25

vi

Kong v. Allied Prof. Ins. Co.,

750 F.3d 1295 (11th Cir. 2014) ........................... 14

Kramer v. Ent. Holdings, Inc.,

829 F. Appx. 259 (9th Cir. 2020) ......................... 29

Lamps Plus, Inc. v. Varela,

139 S. Ct. 1407 (2019) ......................................... 26

McArdle v. AT&T Mobility LLC,

772 F. Appx. 575 (9th Cir. 2019),

cert. denied, 140 S. Ct. 2827 (2020) ............. passim

McGill v. Citibank, N.A.,

393 P.3d 85 (Cal. 2017) ................................ passim

Mitsubishi Motors Corp. v. Soler

Chrysler-Plymouth, Inc.,

473 U.S. 614 (1985) ........................... 16, 17, 24, 26

Perry v. Thomas,

482 U.S. 483 (1987) ............................................. 20

Preston v. Ferrer,

552 U.S. 346 (2008) ............................................. 18

Prima Paint Corp. v. Flood & Conklin Mfg. Co.,

388 U.S. 395 (1967) ............................................. 19

Rent-A-Center, West, Inc. v. Jackson,

561 U.S. 63 (2011) ............................................... 20

Rivera v. Uniqlo Calif., LLC,

2017 WL 6539016 (C.D. Cal. Sept. 8, 2017) ....... 28

Rodriguez de Quijas v. Shearson/

Am. Express, Inc.,

490 U.S. 477 (1989) ............................................. 16

Sanford v. MemberWorks, Inc.,

483 F.3d 956 (9th Cir. 2007) ............................... 14

vii

Shearson/Am. Express, Inc. v. McMahon,

482 U.S. 220 (1987) ....................................... 16, 24

Southland Corp. v. Keating,

465 U.S. 1 (1984) ................................................. 17

Swanson v. H&R Block, Inc.,

475 F. Supp. 3d 967 (W.D. Mo. 2020) .......... 13, 14

Tillage v. Comcast Corp.,

772 F. Appx. 569 (9th Cir. 2019),

cert. denied, 140 S. Ct. 2827 (2020) ............. passim

Volt Info. Scis., Inc. v. Bd. of Trustees of

Leland Stanford Jr. Univ.,

489 U.S. 468 (1989) ....................................... 17, 18

Statutes and Rules

Cal. Civ. Code § 3513 .................................................. 4

California Consumer Legal Remedies Act,

Cal. Civ. Code §§ 1750 et seq. ............................ 1, 4

§ 1751 ..................................................................... 4

California False Advertising Law,

Cal. Bus. & Prof. Code § 17500 ......................... 1, 4

California Unfair Competition Law,

Cal. Bus. & Prof. Code §§ 17200 et seq. ............ 1, 4

Federal Arbitration Act,

9 U.S.C. §§ 1 et seq........................................ passim

9 U.S.C. § 2 ........................................ 17, 18, 19, 20

9 U.S.C. § 3 .......................................................... 28

9 U.S.C. § 10(a)(3)................................................ 24

9 U.S.C. § 16 ........................................................ 14

viii

Fed. R. Civ. P. 23 ...................................................... 23

S. Ct. R. 10 ................................................................ 13

Other

15B Cooper, Federal Practice & Procedure (Wright &

Miller) § 3914.17 (2d ed. updated 2021) ............. 14

INTRODUCTION

Petitioners HRB Tax Group and HRB Digital, affiliates of H&R Block, participated in the IRS’s “Free

File” program to provide taxpayers with free on-line

filing. When taxpayers were lured to HRB’s website

by the promise of free filing, HRB steered them to feefor-service e-filing products. Respondent Derek Snarr

filed this action under California’s Consumer Legal

Remedies Act (CLRA), False Advertising Law (FAL),

and Unfair Competition Law (UCL) seeking injunctive relief against HRB’s bait-and-switch practices.

Longstanding California contract-law principles

preclude waiver of rights under laws that protect the

public. Accordingly, California’s Supreme Court held

in McGill v. Citibank, N.A., 393 P.3d 85 (2017), that

an individual’s right to bring claims for “public injunctive relief” may not be prospectively waived by any

contract, including an arbitration agreement. An

agreement that precludes a consumer from requesting

such relief in any forum at all—even in arbitration—

is therefore unenforceable to that extent. In 2019, the

Ninth Circuit held in Blair v. Rent-A-Center, Inc., 928

F.3d 819, that the Federal Arbitration Act (FAA) does

not preempt the McGill rule. Defendants in two companion cases to Blair—McArdle v. AT&T Mobility

LLC, 772 F. App’x 575 (9th Cir. 2019), and Tillage v.

Comcast Corp., 772 F. App’x 569 (9th Cir. 2019)—filed

petitions for certiorari contending that Blair’s holding

was erroneous. This Court denied the petitions. 140 S.

Ct. 2827 (2020).

In this case, HRB moved to compel arbitration of

Snarr’s claims, invoking an arbitration agreement

that, as HRB acknowledged, purported to bar public

2

injunctions. The district court held that Blair precluded enforcement of the public-injunction waiver.

HRB appealed, arguing that Blair was wrongly decided but citing no intervening authority that would

allow the court of appeals to disregard its precedent.

The Ninth Circuit applied Blair and ruled that the

waiver of public injunctive relief was unenforceable,

and that the arbitration agreement’s severability provision required that the entirety of Snarr’s CLRA,

FAL, and UCL claims be adjudicated in court. HRB

also argued for the first time on appeal that the publicinjunction claims were moot because HRB no longer

participated in the Free File program. The Ninth Circuit held that the mootness argument raised issues

about the voluntary-cessation doctrine that could not

be resolved on the existing factual record, and it left

the issue for the district court to consider.

HRB now seeks review of the question this Court

declined to consider just last year in McArdle and Tillage. HRB relies principally on repetition of the

McArdle petition’s argument that Blair was wrongly

decided—an argument that remains unconvincing for

the reasons explained in the briefs in opposition in

McArdle and Tillage: This Court’s precedents do not

require enforcement of an agreement that, in violation

of state law, waives an individual’s right to seek relief.

HRB claims the issue now merits review because

of a “direct disagreement between lower courts over

whether McGill is preempted by the FAA.” Pet. 3. It

points, however, to only a single district court decision

that is not binding precedent anywhere, even in that

district. A conflict between a federal court of appeals

and a single district court does not merit review by

this Court. While HRB asserts that it is unlikely that

3

a court of appeals will have an opportunity to review

a district court decision that disagrees with Blair and

compels arbitration, it ignores that such decisions are

regularly appealed after arbitration has concluded

and the district court has ruled on an application to

confirm or vacate the award. Review by this Court of

whether Blair was correctly decided is thus no more

important now than it was last year.

In addition, this case’s procedural posture makes it

an exceptionally poor choice for review. HRB fails to

mention that the lower courts are still considering its

efforts to compel arbitration. After the Ninth Circuit’s

decision, HRB filed another motion to compel arbitration, citing a new arbitration agreement that it

claimed Snarr signed while HRB’s appeal was pending. HRB claimed that the new agreement requires

immediate arbitration of Snarr’s statutory claims and

leaves only the availability of a public injunction for

later judicial resolution. The district court denied the

new motion because HRB procured the alleged new

agreement through litigation misconduct. That ruling

is limited to the specific claims in this case, and HRB

does not argue that McGill and Blair will prevent

HRB from enforcing its new agreement in the future.

Moreover, HRB has again appealed the district court's

ruling and continues to seek to apply the new arbitration language even to this case. Meanwhile, HRB

moved to dismiss Snarr’s request for an injunction as

moot, and the district court is considering that motion.

Thus, the lower courts have not definitively resolved

what arbitration agreement governs, whether arbitration will be required, and whether the claim for an injunction is a live one. This Court should not address

this case while those issues remain unresolved.

4

STATEMENT

A. The McGill Rule

California’s CLRA, Cal. Civ. Code §§ 1750 et seq.,

together with the UCL, Cal. Bus. & Prof. Code

§§ 17200 et seq., and FAL, id. § 17500, provide substantive rights and remedies to protect California consumers from unfair and deceptive business practices.

Section 1751 of the CLRA, enacted in 1970, provides

that any agreement purporting to waive its protections is void and unenforceable. Another California

statute, enacted in 1872, prohibits private contracts

that waive rights that exist to protect the public. Cal.

Civ. Code § 3513.

Among the substantive rights that California’s

consumer-protection laws afford is the entitlement to

obtain an injunction for the benefit of the public

against unlawful acts or practices such as false advertising. Unlike private injunctive relief, which is principally intended to benefit individual plaintiffs or discrete classes, public injunctive relief is intended primarily to benefit the general public and only incidentally to benefit individual plaintiffs as members of

the public. See McGill, 393 P.3d at 89. A plaintiff who

has suffered a personal injury-in-fact may seek a public injunction in purely bilateral proceedings against

the defendant; a class or representative action is not

required. Id. at 92–93.

In a pair of decisions preceding this Court’s decision in AT&T Mobility LLC v. Concepcion, 563 U.S.

333 (2011), the California Supreme Court held that

agreements requiring parties to arbitrate claims for

public injunctions were unenforceable. See Broughton

v. Cigna Healthplans, 988 P.2d 67 (1999); Cruz v.

PacifiCare Health Systems, Inc., 66 P.3d 1157 (2003).

5

Following Concepcion, the Ninth Circuit held that the

FAA preempted the Broughton-Cruz rule because the

rule “prohibit[ed] outright the arbitration of a particular type of claim.” Ferguson v. Corinthian Colleges,

Inc., 733 F.3d 928, 932 (2013) (quoting Concepcion,

563 U.S. at 341).

Later, in McGill, the California Supreme Court

considered a contract that, instead of requiring arbitration of public-injunction claims, prohibited them altogether. In a unanimous opinion, the court held that

the case did not present the Broughton-Cruz issue

whether an agreement to arbitrate public-injunction

claims is enforceable, because the parties had, as the

FAA permits, excluded such claims from arbitration.

See McGill, 393 P.3d at 90, 97. Instead, the issue presented was whether the agreement was “valid and enforceable insofar as it purports to waive McGill’s right

to seek public injunctive relief in any forum.” Id. at 90.

McGill held that because California contract law

prohibits private agreements from waiving statutory

rights that protect the public, an agreement that prospectively waives the right to seek public injunctions

is “invalid and unenforceable.” Id. at 93. McGill further held that the FAA does not require enforcement

of public-injunction waivers. The court invoked this

Court’s repeated statements that the FAA requires

courts to “place arbitration agreements on an equal

footing with other contracts” and thus permits them

“to be declared unenforceable upon such grounds as

exist at law and equity for the revocation of any contract.” Id. at 94 (quoting Concepcion, 563 U.S. at 339).

The rule against waivers of substantive rights created

for public protection, McGill explained, is a generally

applicable principle of California contract law that applies to “any contract—even a contract that has no

6

arbitration provision.” Id. McGill also pointed out that

this Court has consistently stated that the arbitration

provisions that the FAA enforces do not encompass

waivers of substantive statutory rights. See id. at 95.

McGill rejected the argument that applying general California contract-law principles to invalidate a

waiver of the right to obtain public injunctive relief

would “disfavor[] arbitration” or “interfere[] with fundamental attributes of arbitration.” Id. at 96. The

court reasoned that waiver of substantive statutory

remedies is not a fundamental attribute of arbitration.

Id. at 97. Moreover, it pointed out that its holding

would not require parties to arbitrate claims for public

injunctions. Rather, the parties could exclude those

claims from arbitration and require arbitration of

other issues, including liability, leaving the issue of

public injunctive remedies for later litigation in court

if the plaintiff showed entitlement to relief. Id. at 97.

B. The Blair decision

In Blair, the Ninth Circuit considered an appeal

from a district court’s ruling that a provision in an arbitration clause waiving the right to public injunctive

relief was unenforceable under McGill. A unanimous

panel held that the FAA does not preempt the McGill

rule. See 928 F.3d 819.

The court began its preemption analysis by recognizing that the McGill rule “is a generally applicable

contract defense” that governs both arbitration and

non-arbitration agreements. Id. at 827. Unlike the

Broughton-Cruz rule that the Ninth Circuit held

preempted in Ferguson, the McGill rule “shows no

hostility to, and does not prohibit, the arbitration of

public injunctions,” but “merely prohibits the waiver

7

of the right to pursue public injunctive relief in any

forum.” Id.

Blair observed that the McGill rule was unlike the

rule that this Court held preempted in Kindred Nursing Centers Limited Partnership v. Clark, 137 S. Ct.

1421 (2017), which “hing[ed] on the primary characteristic of an arbitration agreement—namely a waiver

of the right to go to court and receive a jury trial.” 928

F.3d at 827 (quoting Kindred, 137 S. Ct. at 1427). The

McGill rule does not turn on any attribute inherent to

arbitration. And, unlike in Kindred, the underlying

contract-law principle has repeatedly been applied to

contracts other than arbitration agreements: It “derives from a general and long-standing prohibition on

the private contractual waiver of public rights” that

“California courts have repeatedly invoked … to invalidate waivers unrelated to arbitration.” Id. (citing

cases).

Recognizing this Court’s holdings that even generally applicable contract-law principles may be

preempted if they present an obstacle to accomplishing the FAA’s objectives, id. at 828 (citing Concepcion,

563 U.S. at 341), Blair concluded that McGill does not

deprive parties of arbitration’s benefits. Blair explained that, because public injunctions may be obtained in wholly bilateral proceedings, McGill does not

require the procedural formalities of multiparty or collective proceedings if parties choose to arbitrate

claims for public injunctive relief rather than leave

them for judicial resolution. See id. Moreover, McGill’s

non-waiver principle does not require parties to

change arbitral procedural rules such as those involving discovery. Id. at 830. And issuing or implementing

public injunctions would not exceed the competency of

arbitrators or involve “procedural complexities not

8

already common to the arbitration of private injunctions.” Id.

Blair acknowledged that claims for public injunctive relief may involve some “substantive … complexity,” but held that “[a] state-law rule that preserves

the right to pursue a substantively complex claim in

arbitration without mandating procedural complexity

does not frustrate the FAA’s objectives.” Id. at 829.

Similarly, the court noted that some claims for public

injunctions—like other arbitrable claims including

antitrust, civil RICO, and securities claims—may involve “high stakes” for the defendant. Id. at 830. However, absent “interfere[nce] with the informal, bilateral nature of traditional consumer arbitration,” the

court concluded that “high stakes alone do not warrant FAA preemption” of a rule aimed only at preserving substantive rights. Id.

Finally, Blair emphasized that parties are free to

write severance clauses that allow enforcement of the

remainder of their arbitration agreements while precluding only enforcement of invalid provisions. The

defendant in Blair, however, had written its clause to

require judicial resolution of an entire claim if the

agreement was unenforceable in whole or in part as to

that claim. Id. at 831.

Simultaneously with the published opinion in

Blair, the same panel released unpublished decisions

in two other cases that were argued together with

Blair and disposed of based on its precedential holding. See McArdle, 772 F. Appx. 575; Tillage, 772 F.

Appx. 569. Although the defendant in Blair did not

seek further review, the defendants in McArdle and

Tillage petitioned for rehearing en banc. The court denied rehearing with no judge requesting a vote on en

9

banc review. Both defendants filed petitions for certiorari, which this Court denied in June 2020. 140 S. Ct.

2827 (2020).

C. This case

Derek Snarr, together with a co-plaintiff who is no

longer a party, filed this action in the U.S. District

Court for the Northern District of California in June

2019. When Snarr had sought to use the Free File service to file his 2018 tax return, he was steered to an

HRB site that told him—falsely—that he was not eligible for free filing and charged him fees for filing his

return. Snarr’s lawsuit invoked the CLRA, UCL and

FAL and sought, among other relief, a public injunction against HRB’s practices that mislead taxpayers

into thinking that they are accessing the Free File program when they are in fact using a service for which

they will be charged a fee. Snarr also sought to represent a class of similarly situated consumers.

Although Snarr had opted out of HRB’s arbitration

agreement when filing his 2018 return, HRB moved to

compel arbitration, invoking an arbitration agreement it claimed Snarr signed in 2018 when filing his

2017 tax returns. Snarr argued that the prior arbitration agreement did not, by its terms, apply to the separate filing transactions in 2019. Citing McGill and

Blair, he also contended that the agreement HRB invoked was unenforceable because it waived his right

to obtain public injunctive relief by providing that

“any relief must be individualized to you and shall not

affect any other client.” Pet. App. 27a.

HRB conceded that the agreement included a public-injunction waiver within the meaning of McGill

and Blair, but it argued that Blair was wrongly decided and that Snarr was not really seeking a public

10

injunction anyway. The district court denied HRB’s

motion, ruling that it was bound by Blair and that the

injunction Snarr requested was aimed primarily at

protecting the general public rather than the individual plaintiffs or the putative class. Pet. App. 16a.

HRB appealed the denial of its motion to compel

arbitration, raising the same arguments about Blair

and McGill that it had asserted in the district court. A

Ninth Circuit panel unanimously rejected those arguments in an unpublished opinion, holding that it was

bound by the holding of Blair, id. at 5a, and that Snarr

sought public injunctive relief within the meaning of

McGill because he sought to “enjoin[] deceptive practices directed at the public,” id. at 3a.

HRB also contended that even under McGill, its

agreement’s severability clause required arbitration

of all aspects of Snarr’s CLRA, UCL, and FAL claims,

other than whether a public injunction should issue.

The clause, however, states that if “applicable law precludes enforcement of any of this paragraph’s limitations as to a particular claim for relief, then that claim

for relief (and only that claim for relief) must remain

in court and be severed from any arbitration.” Id. at

27a. Blair had construed “claim for relief” in a similar

severability clause to mean the entirety of a cause of

action. See 928 F.3d at 83–32. The panel held that

Blair’s construction of “very similar severability language” required reading HRB’s severability clause to

provide that “the entire claim … must be severed from

arbitration, rather than just the public injunctive

remedy.” Pet. App. 5a.

Finally, HRB argued that Snarr’s request for a

public injunction (but not for other potential remedies)

was moot because it had stopped participating in the

11

Free File program. Noting that the issue did not go to

Article III jurisdiction over the case, the court exercised discretion not to address it because claims of voluntary cessation of wrongful conduct are “fact-intensive,” and there was “no factual record” on the point.

Id. at 6a. The court also observed that even if HRB

had ceased participation in the IRS program, “some

part of the public injunction sought by Snarr may still

be available.” Id. The court left the argument for later

consideration by the district court.

Back in the district court, HRB then filed a renewed motion to compel arbitration. It contended

that, while the case was on appeal, Snarr had agreed

to a new arbitration agreement when he signed on to

its site in July 2020 to retrieve copies of tax returns

needed for discovery responses. The purported new

agreement had different severability language,

providing: “If a court decides that applicable law precludes enforcement of any of this paragraph’s limitations as to a particular claim or any particular remedy

for a claim (such as a request for public injunctive relief), then that particular claim or particular remedy

(and only that particular claim or particular remedy)

must remain in court and be severed from any arbitration.” Dist. Ct. D.E. 140, at 8. HRB contended that

this language, unlike the former language, required

arbitration of all aspects of Snarr’s statutory claims

except the request for a public injunction. Separately,

HRB moved to dismiss the public-injunction claim as

moot because of HRB’s claimed withdrawal from the

Free File program.

As to the claimed new arbitration agreement,

Snarr argued that HRB’s delay in invoking it waived

reliance on it, that it was unenforceable on numerous

state-law contract grounds, and that HRB had

12

obtained it through improper communications with a

represented party during litigation. Snarr crossmoved for an order preventing HRB from engaging in

such improper communications with him and all

members of the prospective class. As to mootness,

Snarr argued that his public-injunction request presents a live controversy because HRB still engages in

deceptive marketing and because HRB had not carried its heavy burden of showing that its claimed voluntary cessation mooted the claim.

On May 13, 2021, the district court rejected HRB’s

renewed motion to compel on the ground that the purported new agreement was unenforceable as to the

claims in the case because it was an improper attempt

to interfere with the rights of Snarr and other putative

class members during litigation. The court noted that

HRB had been “forced to sign the Revised Agreement

in order to respond to [HRB’s] discovery.” Id. at 14. On

June 1, 2021, HRB appealed the denial of its renewed

motion to compel. Briefing in the appeal has not yet

begun.

Meanwhile, HRB’s mootness motion was argued to

the district court on June 21, 2021. The court has not

yet decided the motion.

REASONS FOR DENYING THE WRIT

I.

A single district court’s disagreement with

Blair does not justify review by this Court.

HRB acknowledges that this Court declined to address the exact question its petition presents just last

year in McArdle and Tillage. HRB does not contend

that the petitions in those cases overlooked any decisional conflict among courts of appeals or state supreme courts. And HRB does not contend that any

13

conflict among the circuits has arisen since last year.

HRB’s merits argument that Blair was wrongly decided under this Court’s FAA precedents—which constitutes the bulk of its case for review by this Court—

is virtually identical to that presented in the petition

in McArdle and cites no new decisions of this Court

not discussed in that petition.

HRB aseerts, however, that the arguments that

did not merit review last year do so now because a single district court decision has now held, contrary to

Blair, that the FAA preempts California’s McGill rule.

See Swanson v. H&R Block, Inc., 475 F. Supp. 3d 967

(W.D. Mo. 2020). One district court’s disagreement

with a precedent of a court of appeals, however, does

not necessitate review by this Court. Such a disagreement can be addressed by the court of appeals for the

circuit where the district court is located. Although

the district court in Swanson predicted that the

Eighth Circuit might disagree with Blair, see id. at

978, unless and until the Eighth Circuit addresses the

issue, it is premature to speculate that its decision

would create an inter-circuit conflict. Meanwhile, the

district court’s ruling does not subject persons in different jurisdictions to differing legal regimes because

Swanson is not binding precedent, not even within the

district that issued it. See Camreta v. Greene, 563 U.S.

692, 709 n.7 (2011). For such reasons, this Court’s

rules specify that conflicts between decisions of federal courts of appeals and/or state courts of last resort—which only this Court can resolve—are a ground

for issuance of a writ of certiorari. See S. Ct. R. 10. The

Court’s rules and practices do not call for resolution of

disagreements between a trial court and a court of appeals.

14

HRB argues that this Court should not await a circuit conflict because decisions of district courts that

disagree with Blair will likely not reach the courts of

appeals, given that interlocutory orders compelling arbitration are not appealable under 9 U.S.C. § 16. HRB

overlooks that the FAA bars only immediate appeal of

interlocutory orders compelling arbitration. Such orders are routinely reviewed by courts of appeals after

arbitration has concluded and the district court has

entered an order confirming or vacating the award, or

when the action in which arbitration was compelled is

otherwise terminated by a final order. See 15B

Cooper, Federal Practice & Procedure (Wright & Miller) § 3914.17 (2d ed. updated 2021) (“An order compelling arbitration becomes reviewable on appeal from

a subsequent final judgment.”); Kong v. Allied Prof.

Ins. Co., 750 F.3d 1295, 1301 (11th Cir. 2014); Sanford

v. MemberWorks, Inc., 483 F.3d 956, 962 (9th Cir.

2007); F.C. Schaffer & Assocs. v. Demech Contractors,

Ltd., 101 F.3d 40, 43 (5th Cir. 1996); see, e.g., First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995)

(reviewing order compelling arbitration following confirmation of award); see also Green Tree Fin. Corp.Ala. v. Randolph, 531 U.S. 79 (2000) (holding order

compelling arbitration appealable when action is dismissed). HRB’s assertion that there will be no occasion

for a circuit split to emerge—or to be obviated by correction of district-court errors—ignores these blackletter principles of appellate jurisdiction.

II. This case is an unsuitable vehicle for addressing the issue.

While Swanson does not make this case a more

worthy candidate for review than were Tillage or

McArdle, the case’s unusual posture makes it a worse

15

candidate. The lower courts have not completed their

consideration of key issues, including: what arbitration agreement governs the parties’ obligations;

whether and to what extent Snarr’s claims would have

to be arbitrated if the Ninth Circuit were to accept

HRB’s argument that the district court erred in concluding that its purported 2020 arbitration agreement

is the unenforceable product of litigation misconduct;

and whether Snarr’s public-injunction claim continues to present a live case or controversy. Moreover, no

court has yet addressed Snarr’s argument that he

opted out of the only arbitration agreement that could

apply to this case—an argument that, if accepted,

would make it unnecessary to decide HRB’s question

presented.

HRB continues to argue below that Snarr is subject

to a new arbitration agreement entered into while this

appeal was pending. And it asserts that, even under

McGill and Blair, that agreement requires Snarr to

arbitrate all other aspects of his CLRA, FAL and UCL

claims before a court may decide whether to issue a

public injunction. Those issues are pending, but not

yet briefed, in the Ninth Circuit. Meanwhile, HRB’s

motion to dismiss Snarr’s public-injunction request as

moot awaits decision by the district court.

Resolution of either issue in HRB’s favor, or both

in combination, could reduce McGill’s impact on this

case or obviate the need to address it. Snarr believes

those results are unlikely, but HRB considers its position meritorious enough to justify motions practice

and a new appeal. And even assuming the lower

courts ultimately rule against HRB on both issues,

resolution of those questions would provide a clearer

factual and legal context for evaluating whether

HRB’s challenge to Blair and McGill merits review.

16

For now, as HRB continues to dispute issues that bear

on McGill’s consequences for this case and whether

there is a live dispute over its applicability, HRB’s request that this Court consider wading into the issue is

premature.

III. Blair was correctly decided.

A. This Court’s decisions do not permit arbitration agreements to waive substantive claims.

1. Blair and McGill are fully consistent with this

Court’s decisions. This Court has never held that the

FAA requires enforcement of a waiver of a substantive

claim, and HRB does not suggest otherwise. This

Court’s decisions enforcing arbitration provisions repeatedly emphasize that arbitration involves a choice

of forum, not a waiver of claims: “By agreeing to arbitrate a statutory claim, a party does not forgo the substantive rights afforded by the statute; it only submits

to their resolution in an arbitral, rather than a judicial, forum.” Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628 (1985); accord

EEOC v. Waffle House, Inc., 534 U.S. 279, 295, n.10

(2002); Gilmer v. Interstate/Johnson Lane Corp., 500

U.S. 20, 26 (1991); Rodriguez de Quijas v. Shearson/Am. Express, Inc., 490 U.S. 477, 481 (1989);

Shearson/Am. Express, Inc. v. McMahon, 482 U.S.

220, 229–30 (1987). An agreement to arbitrate is not

“a prospective waiver of the substantive right.” 14

Penn Plaza LLC v. Pyett, 556 U.S. 247, 265 (2009). Indeed, an arbitration clause containing “a prospective

waiver of a party’s right to pursue statutory remedies”

would be “against public policy.” Mitsubishi, 473 U.S.

at 637, n.19.

17

In American Express Co. v. Italian Colors Restaurant, this Court held that a class-action ban in an arbitration provision was enforceable even though its

practical effects might make particular claims too

costly for the plaintiffs; at the same time, the Court

reiterated that the FAA does not require enforcement

of arbitration provisions that expressly waive statutory claims and remedies. 570 U.S. 228, 236–39

(2013). The Court explained that the principle that an

arbitration provision may not foreclose assertion of

substantive claims “finds its origin in the desire to

prevent ‘prospective waiver of a party’s right to pursue

statutory remedies.’” Id. at 236 (quoting Mitsubishi,

473 U.S. at 637 n.19). The Court added: “That [principle] would certainly cover a provision in an arbitration

agreement forbidding the assertion of certain statutory rights.” Id. Similarly, courts addressing arbitration provisions in other contexts have held that the

FAA does not require enforcement of waivers of substantive claims for relief. See, e.g., Booker v. Robert

Half Int’l, Inc., 413 F.3d 77, 83 (D.C. Cir. 2005) (Roberts, J.) (holding an arbitration provision’s prohibition

on attorney’s fees to be invalid and unenforceable, but

severable).

The Court’s decisions reflect the language of section 2 of the FAA, which makes an agreement to “settle by arbitration a controversy” valid, irrevocable,

and enforceable. 9 U.S.C. § 2. The FAA thus provides

for enforcement of an agreement “to arbitrate,” Volt

Info. Scis., Inc. v. Bd. of Trustees of Leland Stanford

Jr. Univ.,489 U.S. 468, 474 (1989), and “withdr[aws]

the power of the states to require a judicial forum for

the resolution of claims which the contracting parties

agreed to resolve by arbitration,” Southland Corp. v.

Keating, 465 U.S. 1, 10 (1984). Section 2, however,

18

says nothing about the enforcement of an agreement

that does not provide for arbitration of a substantive

claim, but instead purports to waive the claim altogether. Nothing in section 2 withdraws the states’

power to require some forum for the presentation of

claims that parties have not agreed to resolve by arbitration.1

The McGill rule does not implicate section 2 as this

Court has construed it because it does not render unenforceable an agreement to arbitrate a controversy

over the availability of public injunctive relief. It also

does not prevent enforcement of agreements to arbitrate matters other than the availability of public injunctive relief. And it does not prevent arbitration

over such matters from proceeding in accordance with

the parties’ agreement, as the FAA requires. See Volt,

489 U.S. at 475. Rather, the rule honors the parties’

decision to exclude the availability of public injunctive

relief from the scope of their arbitration.

The only agreements that McGill holds unenforceable are those that waive altogether the parties’ right

to obtain public injunctions in some forum. Such

agreements are not within section 2’s enforcement

mandate to begin with because they are not contractual provisions requiring that a matter be settled by

arbitration. Nor are they transformed into arbitration

agreements when embedded in sections of contracts

that otherwise provide for arbitration. This Court’s

––––––––––––––––––––––––

1 For this reason, the principle that the FAA does not require

enforcement of agreements forbidding assertion of claims applies

equally to state and federal claims. Indeed, in Preston v. Ferrer,

this Court held that an arbitration provision was enforceable in

part because the signatory “relinquishe[d] no substantive rights

… California law may accord him.” 552 U.S. 346, 359 (2008).

19

FAA jurisprudence establishes that the enforcement

of an agreement to arbitrate is an entirely separate

matter from the enforcement of a contract’s substantive terms. See Prima Paint Corp. v. Flood & Conklin

Mfg. Co., 388 U.S. 395, 402 (1967) (“[E]xcept where

the parties otherwise intend[,] arbitration clauses as

a matter of federal law are ‘separable’ from the contracts in which they are embedded.”). Only where, as

here, a contract’s severability provisions require other

issues to be resolved by a court if the waiver of public

injunctive remedies is unenforceable does the McGill

rule have the indirect consequence of preventing arbitration of matters the parties otherwise agreed to arbitrate. And even that consequence results from enforcing the terms of the agreement to arbitrate, not

denying enforcement.

2. Blair and McGill are also consistent with this

Court’s repeated recognition that section 2 of the FAA

makes “arbitration agreements as enforceable as

other contracts, but not more so.” Prima Paint, 388

U.S. at 404 n.12. By providing that arbitration provisions “shall be valid, irrevocable, and enforceable,

save upon such grounds as exist at law or in equity for

the revocation of any contract,” 9 U.S.C. § 2, the FAA

“establishes an equal-treatment principle: A court

may invalidate an arbitration agreement based on

‘generally applicable contract defenses’ like fraud or

unconscionability, but not on legal rules that ‘apply

only to arbitration or that derive their meaning from

the fact that an agreement to arbitrate is at issue.’”

Kindred, 137 S. Ct. at 1426 (quoting Concepcion, 563

U.S. at 339); accord Epic Sys. Corp. v. Lewis, 138 S.

Ct. 1612, 1622 (2018).

The Court has repeatedly recognized that generally applicable state-law defenses to “[t]he validity of

20

a written agreement to arbitrate (whether it is legally

binding, as opposed to whether it was in fact agreed

to—including, of course, whether it was void for unconscionability)” are preserved by section 2’s saving

clause. Rent-A-Center, West, Inc. v. Jackson, 561 U.S.

63, 69 n.1 (2011); see also, e.g., Epic, 138 S. Ct. at 1622;

Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S.

440, 444 (2006). Thus, “the text of § 2 declares that

state law may be applied ‘if that law arose to govern

issues concerning the validity, revocability, and enforceability of contracts generally.’” Doctor’s Assocs.,

Inc. v. Casarotto, 517 U.S. 681, 686–87 (1996) (quoting

Perry v. Thomas, 482 U.S. 483, 492–93 n.9 (1987)); accord Arthur Andersen LLP v. Carlisle, 556 U.S. 630–

31 (2009). “States may regulate contracts, including

arbitration clauses, under general contact law principles and they may invalidate an arbitration clause

‘upon such grounds as exist at law or in equity for the

revocation of any contract.’” Allied-Bruce Terminix

Cos. v. Dobson, 513 U.S. 265, 281 (1995) (quoting 9

U.S.C. § 2).

Blair and McGill conscientiously apply these precedents, and their results are fully consistent with this

Court’s insistence that state laws “place[] arbitration

contracts ‘on equal footing with all other contracts.’”

DIRECTV, Inc. v. Imburgia, 577 U.S. 47, 54 (2015)

(quoting Buckeye, 546 U.S. at 443). As Blair and

McGill explain, California law neither discriminates

against arbitration “on its face” nor does so “covertly.”

Kindred, 137 S. Ct. at 1426. Rather, California has for

more than a century applied its general prohibition

against private agreements that waive public rights

“to invalidate waivers unrelated to arbitration.” Blair,

928 F.3d at 827–28 (citing cases decided from 1896 to

2002). The California contract-law principle at issue is

21

not one applicable only “to arbitration agreements and

black swans”; it “in fact appl[ies] generally, rather

than singl[ing] out arbitration.” Kindred, 137 S. Ct. at

1428 & n.2. Indeed, although HRB quotes a dissenting

Ninth Circuit judge’s criticism of the circuit’s application of the FAA’s saving clause in a different context,

Pet. 4, 26–27, it does not argue that the court erred in

holding that the McGill rule is a generally applicable

contract defense within the meaning of the clause.

B. The McGill rule is consistent with the

FAA’s purposes and objectives.

HRB asserts that the FAA impliedly preempts the

McGill rule because, in HRB’s view, the rule is incompatible with the individualized proceedings characteristic of arbitration and thus interferes with the

achievement of the FAA’s purposes and objectives. According to HRB, the court of appeals wrongly “treated

Concepcion as preempting only state-law rules that

impose procedures exactly equivalent to class arbitration.” Pet. 20. The court of appeals, however, did no

such thing. In fact, both Blair and McGill recognized

that, under Concepcion, even a generally applicable

state-law contract doctrine “is nonetheless preempted

by the FAA if it ‘stand[s] as an obstacle to the accomplishment of the FAA’s objectives.’” Blair, 928 F.3d at

828 (quoting Concepcion, 563 U.S. at 341); see McGill,

393 P.3d at 96–97. Blair further acknowledged that

the imposition of procedures incompatible with the bilateral nature of arbitration would create such an obstacle. 928 F.3d at 829.

HRB’s contrary argument reflects its mistaken

view that the FAA’s command that arbitration provisions be enforced extends beyond “terms providing for

individualized proceedings,” Epic, 138 S. Ct. at 1619

22

(emphasis added), and imposes a check on the substantive rights that may be at stake in such proceedings. But the implied preemptive effect of the FAA, as

this Court has construed it, is more limited: “States

cannot require a procedure that is inconsistent with

the FAA, even if it is desirable for unrelated reasons.”

Concepcion, 563 U.S. at 351 (emphasis added). Thus,

the court of appeals was correct to focus on whether

public injunctive relief would require multi-party or

collective procedures or other procedural formalities

incompatible with individualized arbitration, not on

whether the substance of a claim for such relief may

involve consideration of matters beyond the individual

circumstances of the plaintiff.

As Blair explains, the contention that the McGill

rule is inconsistent with the individualized nature of

arbitration procedures and the advantages Congress

sought to achieve by allowing parties to choose such

procedures is unconvincing. A claim for public injunctive relief requires neither the participation of nonparties nor procedural formalities to protect their interests, and it requires no alteration of agreed-to arbitral

mechanisms involving discovery and other procedural

matters. See 928 F.3d at 829–30. Thus, even if parties

choose to arbitrate claims for public injunctive relief

rather than leaving them to judicial resolution, they

need not forgo “arbitration as envisioned by the FAA”

or resort to “a procedure that is inconsistent with the

FAA.” Concepcion, 563 U.S. at 351. The McGill rule in

no way provides “that a contract is unenforceable just

because it requires bilateral arbitration.” Epic, 138 S.

Ct. at 1623.

HRB’s arguments consistently miss the mark in

failing to appreciate that prohibiting a waiver of the

right to obtain public injunctive relief does not entail

23

a change in the nature of arbitration procedures. For

example, HRB asserts that requests for public injunctions have the “same practical effect as a Rule 23(b)(2)

class action.” Pet. 11. A Rule 23(b)(2) injunctive action,

however, asserts claims for relief “respecting the

class,” not the general public, and Rule 23 imposes

procedures regulating how that collective proceeding

may be prosecuted in federal court by the named

plaintiffs who represent the class. Such procedures

are not implicated when an individual plaintiff seeks

a public injunction in arbitration or state court, because California law explicitly states that public injunctions do not require any class, representative, or

collective proceedings. See McGill, 393 P.3d at 93.2

Moreover, a judgment on an individual plaintiff’s

claim for a public injunction under state consumer

protection law is preclusive only as to that plaintiff,

just as is a judgment on an individual plaintiff’s claim

for an injunction under antitrust law, so the claim implicates no due-process concerns requiring collective

procedures. Cf. Concepcion, 563 U.S. at 349 (stating

that procedural formalities would be “required for absent parties to be bound by the results of [class] arbitration”). Nothing in Concepcion, Epic, or this Court’s

other decisions suggests that, absent a requirement of

procedural formalities, an individual plaintiff’s ability

to obtain a substantive statutory remedy transforms

the procedural nature of arbitration.

That public-injunction claims, as a substantive

matter, may involve consideration of the public interest and evidence of the impact of the defendant’s

––––––––––––––––––––––––

2 Here, although Snarr seeks certain relief on behalf a class,

his public-injunction request itself would not require class proceedings if it were subject to arbitration.

24

conduct on the public likewise does not alter the fundamental attributes of arbitration, or transform an individualized, bilateral proceeding into something

more. Many arbitrable claims require consideration of

such evidence, and consideration of whatever evidence

is needed to resolve a claim is a fundamental attribute

of arbitration. See 9 U.S.C. § 10(a)(3). An antitrust

claim pursued in arbitration, for example, typically requires evidence of the anticompetitive effect of the defendant’s conduct and any procompetitive justifications for it—matters that extend far beyond the individual circumstances of the parties. But no one would

suggest that arbitration of an antitrust claim “is not

arbitration as envisioned by the FAA.” Concepcion,

563 U.S. at 351. In Italian Colors, this Court held that

the FAA requires enforcement of agreements to arbitrate antitrust claims despite the cost of developing

such evidence. 570 U.S. at 238–39. This Court has

likewise held that many claims requiring consideration of evidence beyond the individual parties are arbitrable. See, e.g., Mitsubishi, 473 U.S. at 637 (antitrust); McMahon, 482 U.S. at 229–33 (Securities Exchange Act claims); id. at 238–42 (civil RICO claims);

Pyett, 556 U.S. at 258 (employment discrimination

claims); Gilmer, 500 U.S. at 33–35 (federal civil rights

claims). The FAA would not permit, let alone require,

enforcement of an arbitration provision that purported to waive altogether a party’s right to bring such

statutory claims in any forum. See Mitsubishi, 473

U.S. at 637 n.19.

Similarly, consideration of even private injunctive

relief requires consideration of the public interest and

possible effects on nonparties. See Blair, 928 F.3d at

830. Yet HRB does not claim that the public-interest

considerations necessarily involved in issuing such

25

relief require a departure from individualized arbitration proceedings or that an arbitration provision could

permissibly require a party to waive entitlement to

any form of injunctive relief.

HRB’s comparison between the stakes of class arbitration and the stakes of public injunctive relief likewise fails. Concepcion’s holding that requiring collective procedures that dramatically alter the stakes of

arbitration is incompatible with the FAA’s purposes,

see 563 U.S. at 350–51 & n.8, does not imply that the

FAA grants parties a license to contract out of all highstakes substantive rights and remedies. Of course,

some companies may choose, as McGill permits, not to

require consumers to arbitrate claims seeking public

injunctive relief because of their assessment of the

stakes of such litigation. Similarly, a company might

consider antitrust cases or other high-stakes commercial cases unsuitable for arbitration. But HRB does

not suggest that state antitrust laws are by nature inconsistent with bilateral arbitration procedures and

preempted by the FAA for that reason, or that the

FAA would require enforcement of contracts providing

for waiver of such claims. Public-injunction claims are

no different in that respect.

The FAA does not preempt state laws that create

substantive claims for relief just because some parties

might view those claims as poor candidates for arbitration, and it does not require states to allow companies to force consumers to waive altogether any substantive claims that companies would prefer not to arbitrate. Such substantive state laws neither disfavor

contracts that “have the defining features of arbitration agreements” nor “hing[e] on the primary characteristic of an arbitration agreement.” Kindred, 137 S.

Ct. at 1426, 1427. Individualized procedures may be

26

one of those defining features, but waiver of substantive entitlements to relief—even high-stakes ones—is

not. Not even HRB suggests that facilitating otherwise impermissible waivers of substantive rights was

one of the objectives that Congress sought to achieve

in enacting the FAA. Indeed, such waivers are antithetical to the FAA’s purposes. See Mitsubishi, 473

U.S. at 628, 637 n.19.

Moreover, even if it were true, as HRB argues, that

arbitration of high-stakes, substantively complex

claims is not “arbitration as envisioned by the FAA,”

Pet. 22 (quoting Concepcion, 563 U.S. at 355), the consequence would not be that the FAA requires enforcement of agreements waiving such claims. At most, the

implication of such a view might be that it would take

a particularly plain statement of intent to arbitrate

such claims before the FAA would require or permit

their arbitration. See Lamps Plus, Inc. v. Varela, 139

S. Ct. 1407, 1415 (2019). But nothing in the FAA

would authorize enforcement of the waiver of such

substantive claims in the face of contrary state law.

In sum, a state law that seeks only to preserve substantive rights while giving full scope to parties’

choices about whether to arbitrate those rights does

not conflict with the FAA. There is no disagreement

among the lower courts over that proposition and thus

no need for this Court’s intervention.

IV. McGill and Blair do not “blow up” consumer arbitration in California.

HRB argues that review is needed to prevent “enterprising plaintiffs” from “circumventing this Court’s

holdings in Epic and Concepcion” in order “to evade

arbitration in ‘virtually every case’ invoking California consumer protection statutes.” Pet. 22. While

27

purporting to suggest that experience over the past

year suggests that such widespread evasion is now occurring, HRB continues to rely primarily on statements made in articles at the time of Blair that the

decision “blew up” consumer arbitration in California.

Pet. 5. Those assertions, then and now, rest on a misunderstanding. McGill does not allow evasion of arbitration: In accordance with the FAA, it allows companies to require consumers to agree to broad arbitration

provisions covering disputes arising out of their contractual relationships. Many well-known companies

have already crafted arbitration agreements that comply with McGill either by allowing arbitration of public-injunction claims or by deferring such claims to judicial proceedings that would follow arbitration of

other issues. McGill only prohibits a company from

eliminating claims for such relief altogether.

A. Many arbitration agreements are not subject to

McGill because they do not purport to bar public injunctive relief. The Ninth Circuit has held, for example, that typical arbitration agreements that bar class

or representative actions but at the same time provide

that the arbitrator may award claimants all the relief

to which they are entitled in an individual lawsuit do

not bar public injunctions and are therefore not subject to McGill. See DiCarlo v. MoneyLion, Inc., 988

F.3d 1148, 1156-57 (9th Cir. 2021). That is, McGill

does not bar enforcement of an arbitration provision

that allows an arbitrator to issue public injunctive relief. See Greenley v. Avis Budget Group Inc., 2020 WL

1493618, at *8 (S.D. Cal. March 27, 2020); GonzalezTorres v. Zumper, Inc., 2019 WL 6465283, at *8 (N.D.

Cal. Dec. 2, 2019). Similarly, under McGill, courts

have held that an arbitration provision that is silent

as to the availability of public injunctive relief will be

28

enforced. See Rivera v. Uniqlo Calif., LLC, 2017 WL

6539016 (C.D. Cal. Sept. 8, 2017); see also Aanderud

v. Super. Ct., 221 Cal. Rptr. 3d 225, 239 (Cal. Ct. App.

2017). The agreement in this case, by contrast, fell under McGill because of its distinctive language that

forecloses any relief that would benefit individuals

other than the plaintiff.

McGill also allows a defendant to exclude public

injunctive relief from arbitration while requiring arbitration of the rest of a consumer’s claims, as long as

the consumer eventually has the ability to seek public

injunctive relief in court. See, e.g., Eiess v. USAA Fed.

Sav. Bank, 404 F. Supp. 3d 1240 (N.D. Cal. 2019). Indeed, the defendant can write its agreement to require

that arbitration (including on liability and other forms

of relief on the claims that underlie the request for

public injunctive relief) precede any judicial proceedings on public injunctive relief. See id. at 1260 (staying

litigation of public-injunction claims pending arbitration pursuant to 9 U.S.C. § 3); see also McGill, 393

P.3d at 97 (noting appropriateness of such stays);

Blair, 928 F.3d at 831 (“Parties are welcome to agree

to split decisionmaking between a court and an arbitrator in this manner.”). Thus, the defendant will receive the full benefits of arbitration, subject only to the

requirement that, at some point, it litigate over possible public injunctive relief if the plaintiff succeeds in

proving liability.

Indeed, a defendant can achieve this result even if

its arbitration provision contains an invalid waiver of

public injunctive relief, as long as the agreement permits severance of the public-injunction waiver from

the agreement to arbitrate other issues. A company

that does not wish to arbitrate public-injunction issues but otherwise wants to compel arbitration may

29

tailor its severance provision to determine the extent

to which claims involving public injunctive relief are

or are not arbitrated. It may, as HRB did in the agreement that is the subject of this appeal, provide that

any cause of action involving public injunctive relief

must be litigated in its entirety; or, as HRB attempted

to do in the new agreement that it is continuing to try

to enforce in its new appeal, it may seek to split off the

remedial issue alone for resolution in court while otherwise providing for arbitration of the remainder of a

plaintiff’s claims. With all these options available, a

company would lose its ability to arbitrate consumer

claims completely only if it chose to make its publicinjunction waiver inseverable from the rest of its arbitration agreement rather than taking the more typical

approach of requiring severance of invalid or unenforceable provisions.

B. That large numbers of consumer plaintiffs may

include claims for injunctive relief in their complaints

does not mean that they will “side-step” arbitration.

Pet. 23. Claims for injunctive relief in consumer cases

do not trigger the McGill rule unless they satisfy

McGill’s detailed criteria defining what qualifies as

“public injunctive relief.” See McGill, 393 P.3d at 89–

90. The Ninth Circuit, for example, has ruled that

claims for injunctive relief that could be crafted to benefit the plaintiff or a plaintiff class rather than serving

principally to benefit the public and only incidentally

benefiting the plaintiff are not claims for public injunctive relief within the meaning of McGill. See Kramer v. Ent. Holdings, Inc., 829 F. Appx. 259 (9th Cir.

2020).

HRB acknowledges that 90 percent of the complaints it has tallied seeking injunctive relief under

the CLRA, UCL and FAL do not specify that they seek

30

public injunctive relief. See Pet. 24. And even complaints that expressly refer to public injunctive relief

do not necessarily bring the McGill rule into play.

“Merely declaring that a claim seeks a public injunction … is not sufficient to bring that claim within the

bounds of the rule set forth in McGill.” Colopy v. Uber

Techs. Inc., 2019 WL 6841218 (N.D. Cal. Dec. 16,

2019). HRB’s figures about the number of complaints

that have sought public injunctive relief—besides not

being a tremendously large number for a state the size

of California during the more than five years since

McGill—say little about about how many cases truly

implicate McGill and what its actual effects on arbitration may be.

In any event, plaintiffs who plead proper claims for

public injunctive relief do not thereby “evade” arbitration. Pet. 22. An arbitration provision will remain enforceable unless it precludes public injunctive relief in

any forum and is written to prevent severance of that

invalid waiver from otherwise enforceable arbitration

provisions. Thus, a plaintiff whose arbitration agreement excludes public injunctive relief from the scope

of arbitration is still likely to be required to arbitrate

liability and other forms of relief before being able—if

she can establish liability—to request public injunctive relief from the court.

The possibility that, at the end of the day, an individual who otherwise succeeds in proving liability in

individual proceedings will be able to present a claim

for public injunctive relief either to an arbitrator or a

court thus hardly amounts to the revival of class proceedings under another name, as HRB suggests. See

Pet. 24. In particular, such cases present no possibility

of aggregated damages awards (and associated common-fund class fee awards), which was the principal

31

feature of class proceedings of concern to the Court in

Concepcion. See 563 U.S. at 350.

C. For all these reasons, HRB’s assertions that

Blair and McGill have disrupted settled contractual

expectations and prevented companies from reaping

the benefits they perceive in arbitration are unsupported. All indications are that companies have responded to McGill in varying ways that reflect their

choices about how to use the broad flexibility they retain under McGill to structure arbitration agreements

to their liking without using them impermissibly to effect waivers of nonwaivable substantive rights.

Even before McGill, not all arbitration provisions

precluded arbitration of public-injunction claims, and

many companies continue to use broad arbitration

agreements that allow any form of relief available to

an individual in court. Ticketmaster’s terms, for example, provide that all customer claims are subject to

individual arbitration, in which the arbitrator may

award any relief provided by law, specifically including “public injunctive relief.”3 Other companies, such

as Williams-Sonoma, have created provisions permitting customers to seek public injunctive relief in court,

but requiring that any such proceedings happen only

if, and after, the customer arbitrates liability and

other requested relief.4 Still others, including Discover

and Bank of the West, continue to include public-injunction waivers but make them severable if invalid

or unenforceable, thus permitting a plaintiff to seek

––––––––––––––––––––––––

https://help.ticketmaster.com/s/article/Terms-of-Use?language=en_US#section17, ¶ 17 (visited July 9, 2021).

4 https://www.williams-sonoma.com/customer-service/legalstatement.html#terms (visited July 9, 2021).

3

32

such relief in court but otherwise requiring arbitration

to the extent specified by the agreement.5

HRB itself has made similar adaptations. The

clause at issue in this appeal reflected HRB’s choice to

sever and litigate, rather than arbitrate, claims for relief involving public injunctive remedies if the publicinjunction waiver is unenforceable. When HRB decided it was unsatisfied with the language it drafted

requiring litigation of entire causes of action, HRB rewrote it to narrow the issues to be decided in court and

broaden the scope of arbitration. The district court

found the new language unenforceable against Snarr

because HRB improperly obtained his “agreement” to

it mid-litigation, but the revision shows that HRB can

tailor its agreement to maximize its ability to arbitrate while achieving its objective of not arbitrating

future public-injunction requests.

HRB’s protest that McGill’s flexibility does not allow defendants to choose arbitration “as envisioned by

the FAA,” Pet. 26, rings hollow. A company that does

not believe arbitration of public-injunction claims

comports with the FAA’s—or the company’s—vision of

arbitration is free to craft its consumer contracts to

exclude public injunctions from arbitration. It is prohibited only from forcing a plaintiff to waive the substantive right to a form of relief authorized by state

law. And this Court has never held that the FAA “envisions” that companies can force plaintiffs to waive

substantive rights protected by state law.

––––––––––––––––––––––––

https://www.discover.com/content/dam/dfs/credit-cards/

cardmember-agreement/EBZ_21_823701_01_Cardmember+Agr

eement_Prime_Release.pdf, p.4 (visited July 9, 2021);

https://www.bankofthewest.com/-/media/pdf/deposits/personalaccount-disclosure.pdf, p.57 (visited July 9, 2021).

5

33

D. For these reasons, HRB’s assertion that Blair’s

holding has led or will lead to widespread avoidance

of arbitration remains unsupported. Indeed, while

HRB cites several cases in which lower courts have

applied Blair and McGill, it does not demonstrate that

there are large numbers of cases in which doing so has

led to avoidance of arbitration altogether, as opposed

to the carving out of one issue that the defendant

wishes to exclude from arbitration. Cases where the

McGill rule precludes arbitration will likely become

increasingly rare as companies abandon the self-defeating tactic of writing “blow-up” clauses (such as the

ones in McArdle and Tillage) that foreclose arbitration

if the public-injunction waiver is held unenforceable.

Again, consideration of the issue would be particularly inappropriate here, where the impact of McGill

rule is undetermined because of unresolved issues

about what, if any, arbitration agreement applies and

whether the public-injunction claim is moot. If review

were otherwise justified, a case where invalidation of

a public-injunction waiver resulted in either an arbitrator’s issuance of such an injunction or a court’s issuance of an injunction following the arbitration of

other issues would allow a more informed assessment

of McGill’s impact on arbitration. In this case, the

lower courts should be allowed to complete their resolution of the many issues posed by HRB’s attempts to

avoid the merits.

CONCLUSION

The Court should deny the petition for a writ of certiorari.

34

Respectfully submitted,

SETH A. SAFIER

ADAM J. GUTRIDE

GUTRIDE SAFIER LLP

100 Pine Street

Suite 1250

San Francisco, CA

(415) 639-9090

MATTHEW T. MCCRARY

GUTRIDE SAFIER LLP

4450 Arapahoe Avenue

Suite 100

Boulder, CO 80303

(415) 639-9090

SCOTT L. NELSON

Counsel of Record

ALLISON M. ZIEVE

PUBLIC CITIZEN

LITIGATION GROUP

1600 20th Street NW

Washington, DC 20009

(202) 588-1000

snelson@citizen.org

STEPHEN M. RAAB

GUTRIDE SAFIER LLP

305 Broadway, 7th Floor

New York, NY 10007

(415) 639-9090

Attorneys for Respondent

July 2021