Amicus Curiae Brief — Live Nation Entertainment, Inc., et al., Petitioners v. Skot Heckman, et al.

No. 24-1145

In the

Supreme Court of the United States

LIVE NATION ENTERTAINMENT, INC., ET AL.,

Petitioners,

v.

SKOT HECKMAN, ET AL.,

Respondents.

_____________________________

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

_____________________________

BRIEF AMICUS CURIAE OF

CALIFORNIA EMPLOYMENT LAW COUNCIL

IN SUPPORT OF PETITIONER

_______________________________

Alexander T. MacDonald

Counsel of Record

James A. Paretti, Jr.

LITTLER MENDELSON, P.C.

815 Connecticut Ave., NW

Washington, DC 20006

(202) 842-3400

amacdonald@littler.com

Counsel for Amicus Curiae

GibsonMoore Appellate Services, LLC

206 East Cary Street♦ Richmond, VA 23219

804-249-7770 ♦

www.gibsonmoore.net

i

TABLE OF CONTENTS

Page:

TABLE OF AUTHORITIES....................................... ii

INTEREST OF AMICUS CURIAE ........................... 1

BACKGROUND ......................................................... 2

SUMMARY OF ARGUMENT .................................... 3

ARGUMENT .............................................................. 5

I. THE

NINTH

CIRCUIT’S

DECISION

IMPROPERLY EXCLUDES ALTERNATIVE

ARBITRATION PROCEDURES FROM THE

COVERAGE OF THE FAA................................... 5

A. Nothing In the Text of the FAA Limits Its

Scope to “Bilateral” Arbitration. ..................... 6

B. Arbitration In Many Different Forms PreDated Congressional Adoption of the FAA. .... 9

II. THE NINTH CIRCUIT’S APPLICATION OF

CALIFORNIA’S

ARBITRATION-ONLY

SEVERABILITY

DOCTRINE

TREATS

ARBITRATION

AGREEMENTS

LESS

FAVORABLY THAN OTHER CONTRACTS

IN VIOLATION OF THE FAA. .......................... 12

A. Application of California’s Severability

Doctrine Disfavors Arbitration Agreements

in Violation of the FAA.................................. 12

B. This Significance of This Issue Has Only

Grown In this Court Since It Last Granted

Certiorari. ...................................................... 16

CONCLUSION ......................................................... 18

ii

TABLE OF AUTHORITIES

Page(s):

Cases:

Allied-Bruce Terminix Cos. v. Dobson,

513 U.S. 265 (1995) ......................................... 6, 14

Armendariz v.

Foundation Health Psychare Services, Inc.,

24 Cal. 4th 83,

6 P.3d 669 (Cal. 2000) .................................... 13-17

AT&T Mobility LLC v. Concepcion,

563 U.S. 333 (2011) ...................... 5, 7, 8, 12, 14-17

Beynon v. Garden Grove Med. Grp.,

100 Cal. App. 3d 698,

161 Cal. Rptr. 146 (Ct. App. 1980) ..................... 14

Buckeye Check Cashing, Inc. v. Cardegna,

546 U.S. 440 (2006) ............................................. 14

Cleveland Wrecking Co. v.

Iron Workers Loc. 40,

136 F.3d 884 (2d Cir. 1997) ........................... 10-11

Comcast Cable Communications, LLC v. Ramsey,

S. Ct. No. 24-365 (Oct. 28, 2024) ........................ 15

Dean Witter Reynolds, Inc. v. Byrd,

470 U.S. 213 (1985) ............................................... 7

Dish Network L.L.C. v. Ray,

900 F.3d 1240 (10th Cir. 2018) ............................. 8

Doctor's Assocs., Inc. v. Casarotto,

517 U.S. 681 (1996) ............................................. 14

Gilmer v. Interstate/Johnson Lane Corp.,

500 U.S. 20 (1991) ............................................... 15

iii

Green Tree Fin. Corp. v. Bazzle,

539 U.S. 444 (2003) ............................................. 11

Jock v. Sterling Jewelers, Inc.,

942 F.3d 617 (2d Cir. 2019) .................................. 8

MacClelland v. Cellco P’Ship,

609 F. Supp. 3d 1024 1044 (N.D. Ca. 2022) ....... 14

Marmet Health Care Ctr., Inc. v. Brown,

565 U.S. 530 (2012) ............................................. 14

MHN Gov’t Servs., Inc. v. Zaborowski,

576 U.S. 1095 (2015), dismissed,

578 U.S. 917 (2016) ............................................. 12

Mitsubishi Motors Corp. v.

Soler Chrysler-Plymouth, Inc.,

473 U.S. 614 (1985) ............................................... 7

Moses H. Cone Mem’l Hosp. v.

Mercury Constr. Corp.,

460 U.S. 1 (1983) ................................................... 6

Nitro-Lift Techs., LLC v. Howard,

568 U.S. 17 (2012) (per curiam) ........................... 7

Perry v. Thomas,

482 U.S. 483 (1987) ............................................. 14

Preston v. Ferrer,

552 U.S. 346 (2008) ............................................. 14

Rent-A-Ctr., W., Inc. v. Jackson,

561 U.S. 63 (2010) ............................................... 14

Rodriguez de Quijas v.

Shearson/Am. Express, Inc.,

490 U.S. 477 (1989) ............................................... 5

S. Commc’ns Servs., Inc. v. Thomas,

720 F.3d 1352 (11th Cir. 2013) ............................. 8

v

Daniel Centner & Megan Ford, A Brief

Primer on the History of Arbitration,

Arbitration and the Surety ........................................ 9

Earl Wolaver, The Historical Background of

Commercial Arbitration ........................................... 10

E. Gary Spitko, Federal Arbitration Act

Preemption of State Public-Policy-Based

Employment Arbitration Doctrine: An Autopsy

Argument for Federal Agency Oversight,

20 Harv. Negot. L. Rev. 1 (2015) ...................... 15

Frank D. Emerson,

History of Arbitration Practice and Law,

19 Clev. St. L. Rev. 155 (1970)............................ 9

J. Maria Glover, Mass Arbitration,

74 Stan. L. Rev. 1283 ........................................ 16

Ord. Clothworkers, London,

29 Eliz. (1587) .................................................... 10

United States, Minnesota Law Review 2296 .......... 10

iv

Sonic-Calabasas A., Inc. v. Moreno,

311 P.3d 184 (Cal. 2013) ..................................... 15

Southland Corp. v. Keating,

465 U.S. 1 (1984)., 104 S.Ct............................ 6, 14

Stolt-Nielson S.A. v. AnimalFeeds Int’l Corp.,

559 U.S. 662 (2010) ............................................... 8

Sun Coast Res., Inc. v. Conrad,

956 F.3d 335 (5th Cir. 2020) ................................. 8

Sutter v. Oxford Health Plans LLC,

675 F.3d 215 (3d Cir. 2012), aff’d,

569 U.S. 564 (2013) ............................................... 8

In re U.S. Postal Serv.,

Case No. Q15C-4Q-J (May 24, 2022) ................. 10

United Leather Workers’ Int’l Union v.

Herkert & Meisel Trunk Co.,

265 U.S. 457 (1924) ............................................... 6

United Mine Workers of Am. v.

Coronado Coal Co.,

259 U.S. 344 (1922) ............................................... 6

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

Leland Stanford Junior Univ.,

489 U.S. 468 (1989) ............................................... 8

Statutes:

9 U.S.C. § 2 ......................................................... 5, 6, 8

Federal Arbitration Act (FAA) ......... 3-9, 11, 12, 14-18

Other Authorities:

Andrew Pincus et al., Mass Arbitration

Shakedown: Coercing Unjustified Settlements . 16, 17

Bazzle: A New Day for Class Arbitrations............... 11

1

California Employment Law Council respectfully

submits this brief as amicus curiae in support of the

petitioner. 1

INTEREST OF AMICUS CURIAE

Amicus curiae California Employment Law

Council (CELC) files this brief in support of

petitioners Live National Entertainment, Inc. and

Ticketmaster L.L.C. (collectively hereinafter, “Live

Nation”). CELC is a voluntary, nonprofit organization

that promotes the common interests of employers and

the public in fostering the development in California

of reasonable, equitable, and progressive rules of

employment law. CELC’s membership includes

roughly 80 private-sector employers in California who

collectively employ more than a half-million

Californians. CELC has participated as an amicus in

many of California’s leading employment cases as

well as in this Court.

Many members of CELC have arbitration

agreements with some or all of their employees. They

therefore have a significant stake in the outcome of

this case. CELC’s experience with and expertise in the

practical aspects of employment matters allow it to

assist this Court in evaluating the issues here.

Amicus is well-suited to address these

considerations and the importance of the issues

beyond the immediate concerns of the parties to the

1 Pursuant to this Court’s Rule 37.6, counsel for amicus curiae

certifies that no counsel for a party authored this brief in whole

or in part, and no person or entity other than amicus curiae,

their members, or their counsel made a monetary contribution

to the preparation or submission of this brief. At least ten days

before the brief was due, counsel for amicus curiae served notice

of the intent to file this brief on counsel for each party.

2

case. They file this brief to assist the Court in

evaluating the real-world consequences of the Ninth

Circuit’s decision and to underscore that it is critical

that the Court grant certiorari.

BACKGROUND

Petitioner Live Nation operates websites through

which they sell tickets to entertainment events. The

websites’ Terms of Use include an agreement

providing for arbitration of any dispute relating to the

use of the website or ticket purchases. The arbitration

agreement provides that the arbitrator has the sole

authority to resolve disputes as to the interpretation,

applicability, enforceability, or formation of the

agreement. Live Nation and respondents agreed that

if any term of the arbitration agreement was deemed

unlawful or unenforceable, those provisions should be

severed and the rest of the agreement enforced.

Respondents purchased tickets on Live Nation’s

website and subsequently filed an antitrust lawsuit in

federal district court. In accordance with the

arbitration agreement to which respondents agreed,

Live Nation moved to compel arbitration.

The district court denied Live Nation’s motion to

compel arbitration, concluding that the subject

arbitration agreement contained unconscionable

provisions. Next, applying a severability analysis

under California law applicable only to arbitrations,

the district court declined to sever the offending

provisions from the remainder of the agreement and

instead nullified it in toto.

On appeal, the Ninth Circuit upheld the district

court’s denial of Live Nation’s motion to compel,

concluding that the Federal Arbitration Act (FAA),

3

“simply does not apply” to the mass arbitration

procedures contained in Live Nation’s arbitration

agreement, largely because, in its view, they “did not

exist” when the FAA was adopted in 1925. Cert. Pet.

at 29-30. Further, relying upon the lower court’s

analysis of severability under state law (the

application of which, as explained below, violates the

FAA), the Court of Appeals upheld the lower court’s

finding that several provisions in the arbitration

agreement were unconscionable, and despite the

express severability clause contained in the

agreement, affirmed the lower court’s conclusion that

these provisions rendered the entire arbitration

agreement unenforceable.

Live Nation timely filed a petition for a writ of

certiorari in this Court.

SUMMARY OF ARGUMENT

Amicus CELC respectfully requests that this

Court grant this petition for writ of certiorari for two

reasons:

First, the decision of the Ninth Circuit holding

that the FAA does not apply to arbitrations other than

the traditional bilateral arbitrations is in direct

contravention of the terms of the statute and the

scope of its coverage as interpreted by this Court and

threatens countless employers with attempted

blackmail via mass arbitration demands.

The nationwide mass arbitration problem can best

be illustrated by an on-point hypothetical. Assume, as

in this case, a business that has individual arbitration

agreements with thousands of customers and/or

employees. Assume, as in this case, the arbitration

claimants

have

similar

or

identical

4

grievances. Enterprising plaintiffs’ counsel, barred

by the individual arbitration agreements from

proceeding in court with a class action, using internet

solicitation to locate clients, file thousands of

individual demands for arbitration. The arbitration

organization, such as the American Arbitration

Association (AAA), sends out an initial billing only to

the party demanding arbitration. The Rules of the

AAA provide that the initial payment must cover

administrative charges and an advance against the

arbitrator’s fees – typically into five figures.

Unless the arbitration agreement contains a

provision to protect the arbitration process against

this sort of mass arbitration abuse, both the math and

the blackmail potential of mass arbitration demands

are obvious. $10,000 per arbitration as an initial

arbitration fee times 1,000 claimants is ten million

dollars ($10,000,000), just to start the arbitration

process. This is regardless of the merits or the

frequently small amounts actually at issue.

To protect against this abusive blackmail,

arbitration agreements frequently contain clauses

such as “bellwether” provisions. The protections

vary, but typical would be a bellwether provision that

only the first ten or so claims proceed to active

arbitral litigation. The remaining claims are put on

hold. As each of the first ten is resolved, a remaining

claim moves to arbitration. No fees are due for other

than the first ten arbitrations until additional claims

move to active arbitration.

But the Ninth Circuit says arbitral protections

against the abusive mass arbitration tactic violate the

FAA and void the arbitration agreements. Other

5

Circuits disagree. This Court’s guidance is urgently

needed.

Second, review by this Court is necessary because

the Ninth Circuit’s affirmation of California’s

arbitration-only severability doctrine, which singles

out arbitration agreements for less favorable

treatment than other contracts, likewise violates the

FAA.

ARGUMENT

I. THE

NINTH

CIRCUIT’S

DECISION

IMPROPERLY EXCLUDES ALTERNATIVE

ARBITRATION PROCEDURES FROM THE

COVERAGE OF THE FAA.

The Federal Arbitration Act, 9 U.S.C. §§ 1–16,

“was enacted in 1925 in response to widespread

judicial hostility to arbitration agreements.” AT&T

Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011).

The FAA “declares as a matter of federal law that

arbitration agreements ‘shall be valid, irrevocable,

and enforceable, save upon such grounds as exist at

law or in equity for the revocation of any contract.’”

Rodriguez de Quijas v. Shearson/Am. Express, Inc.,

490 U.S. 477, 483 (1989) (quoting 9 U.S.C. § 2).

Accordingly, only generally applicable contract

defenses, such as fraud, duress, or unconscionability,

can be used to invalidate an arbitration agreement. It

is against this backdrop that the Ninth Circuit’s

conclusion that the FAA was not applicable to multiparty arbitrations or, indeed, anything other than

“traditional, bilateral” arbitration common in 1925

when the FAA was adopted, must be measured.

6

A. Nothing In the Text of the FAA Limits Its

Scope to “Bilateral” Arbitration.

The scope of the FAA is exceedingly broad, and

this Court has routinely construed the statute to have

extensive reach: “[A] broad interpretation of this

language is consistent with the Act's basic purpose,

while a narrower interpretation would create a new,

unfamiliar test that would unnecessarily complicate

the law and breed litigation. For these reasons, the

Act's scope can be said to have expanded along with

the commerce power over the years, even though the

Congress that passed the Act in 1925 might well have

thought the Commerce Clause did not stretch as far

as has turned out to be so.” Allied-Bruce Terminix

Cos. v. Dobson, 513 U.S. 265, 266 (1995) (citing, inter

alia, United Mine Workers of Am. v. Coronado Coal

Co., 259 U.S. 344, 410 (1922); United Leather

Workers’ Int’l Union v. Herkert & Meisel Trunk

Co., 265 U.S. 457, 470 (1924)). And as the Court has

previously observed, the FAA’s “legislative history, to

the extent that it is informative, indicates an

expansive congressional intent, and this Court has

described the Act's reach expansively as coinciding

with that of the Commerce Clause.” Id. (citing

Southland Corp. v. Keating, 465 U.S. 1, 14-15 (1984)

at 14–15)., 104 S.Ct., at 860.

Section 2 of the FAA is the “primary substantive

provision of the Act.” Moses H. Cone Mem’l Hosp. v.

Mercury Constr. Corp., 460 U.S. 1, 24 (1983). It

provides in relevant part that “a written provision to

settle by arbitration a controversy thereafter

arising… 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. Section 2

“reflect[s] both a ‘liberal federal policy favoring

7

arbitration,’” Concepcion, 563 U.S. at 339 (citation

omitted), and the “‘fundamental principle that

arbitration is a matter of contract.’” Id. (citation

omitted). See also Nitro-Lift Techs., LLC v. Howard,

568 U.S. 17, 20-21 (2012) (per curiam). “Although § 2’s

saving clause preserves generally applicable contract

defenses, nothing in it suggests an intent to preserve

state-law rules that stand as an obstacle to the

accomplishment of the FAA's objectives.” Concepcion,

563 U.S. at 343 (citations omitted).

“The preeminent concern of Congress in passing

the Act was to enforce private agreements into which

parties had entered,’ a concern which ‘requires that

[courts] rigorously enforce agreements to arbitrate.’”

Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth,

Inc., 473 U.S. 614, 625-26 (1985) (citation omitted).

“By its terms … the FAA mandates that district

courts shall direct the parties to proceed to arbitration

on issues as to which an arbitration agreement has

been signed.” Dean Witter Reynolds, Inc. v. Byrd, 470

U.S. 213, 218 (1985).

As discussed infra, the concept of multi-party

arbitration was not new in 1925, is not new now, and

has been repeatedly held by this Court to be within

the scope of the FAA. For exactly this reason, the

district court quickly rejected the argument that

Concepcion is inapplicable because it was a case

involving bilateral rather than multi-party or mass

arbitrations: “[T]here is no clear indication that once

the Supreme Court considers the creation and use of

mass arbitrations, it will reconsider its ruling that the

FAA prohibits States from conditioning the

enforceability of certain arbitration agreements on

the availability of class-wide arbitration procedure.”

Cert. Pet. at 90a. In that light, the Ninth Circuit’s

8

resurrection of the argument as an “alternate and

independent ground” on which to uphold the lower

court’s decision was confounding if not downright

baffling. The fact that class-wide arbitration was not

prevalent at the time the FAA was adopted has no

bearing on the question of whether a multi-party

arbitration agreement falls within the broad and

expansive scope of section 2 this Court has

historically and routinely provided.

This Court has “said on numerous occasions that

the central or ‘primary’ purpose of the FAA is to

ensure that ‘private agreements to arbitrate are

enforced according to their terms.’” Stolt-Nielson S.A.

v. AnimalFeeds Int’l Corp., 559 U.S. 662, 682 (2010)

(quoting Volt Info. Scis., Inc. v. Bd. of Trs. of Leland

Stanford Junior Univ., 489 U.S. 468, 479 (1989)).

Moreover, in Concepcion, it expressly noted that

parties may agree to arbitration “envisioned by the

FAA” by “agree[ing] to aggregation.” 563 U.S. at 351.

In light of these facts, it is telling that of the six

courts of appeals to have addressed this question, only

the Ninth has adopted so cramped a conclusion and

held that anything other than traditional, bilateral

arbitration is excluded from FAA coverage. See Jock

v. Sterling Jewelers, Inc., 942 F.3d 617, 620 (2d Cir.

2019) (FAA governed arbitrator’s determination that

subject agreement permitted class-wide arbitration);

Sutter v. Oxford Health Plans LLC, 675 F.3d 215, 219

(3d Cir. 2012) (same), aff’d 569 U.S. 564 (2013); Sun

Coast Res., Inc. v. Conrad, 956 F.3d 335, 337 (5th Cir.

2020) (same); Dish Network L.L.C. v. Ray, 900 F.3d

1240, 1248 (10th Cir. 2018) (same); S.

Communications Servs., Inc. v. Thomas, 720 F.3d

1352, 1359-60 (11th Cir. 2013) (same). As it affirmed

in Sun Coast Resources, petitioners respectfully

9

submit that this Court should reverse the Ninth

Circuit’s outlier decision and make plain that the

FAA’s coverage encompasses many varying forms of

arbitration and is not narrowly limited to traditional,

bilateral forms of arbitration that existed in 1925.

B. Arbitration In Many Different Forms PreDated Congressional Adoption of the FAA.

Moreover, even if the Ninth Circuit’s conclusion

that the FAA only extends its coverage to those forms

of arbitration that were in existence when it was

enacted is correct—which it is not—the court’s

reasoning is belied by history. Arbitration in

numerous forms existed long before Congress adopted

the FAA, long before the Founding Fathers formed

our nation, and before the ancient Romans erected the

Colosseum. The Ninth Circuit’s conclusion that

arbitration beyond the traditional bilateral model is a

novel, modern-day invention and simply did not exist

before the enactment of the FAA is an error of fact

that leads to an error of law.

“Arbitration is not a modern tool employed to

avoid certain disadvantages associated with

contemporary litigation; rather, the roots of

arbitration can be traced through history to the most

primitive societies as a preferred method of dispute

resolution.” Daniel Centner & Megan Ford, A Brief

Primer on the History of Arbitration, Arbitration and

the Surety, at 1-2. See generally Frank D. Emerson,

History of Arbitration Practice and Law, 19 Clev. St.

L. Rev. 155 (1970) (tracing development of arbitration

from biblical roots through modern times and

concluding observing “arbitration is today, as it was

in yesteryears, a dynamic institution for the peaceful

settlement of discord, differences, and disputes.”).

10

Arbitration was common in seventeenth- and

eighteenth-century mercantile law, which allowed

parties to resolve trade disputes among multiple

parties and trade and craft guilds. Sabra A. Jones,

Historical Development of Commercial Arbitration in

the United States, Minnesota Law Review 2296, at

243. By 1916 there were roughly 3,000 trade

associations or “groups of business men” in

manufacturing, mining, and mercantile industries,

many of which “seeing the practicability of

arbitration, made their own rules on arbitration.” Id.

at 248-49.

These arbitral bodies attracted merchants and

other businessmen in large part because of their

procedural flexibility. They were not bound by local

law, but instead, practiced a kind of private

international law. See Earl Wolaver, The Historical

Background of Commercial Arbitration, 84 Penn. L.

Rev. 133, 145 (1934). They allowed itinerant

merchants to recover their debts in a quick, efficient

proceeding, not bogged down by differences in local

practice and custom. Id. at 137. And that proceeding

did not always center on a bilateral dispute between

two litigants. For example, the English guilds could

arbitrate disputes not only between two guild

members, but also disputes between members and

their various journeymen and apprentices. See id. at

134 (citing Ord. Clothworkers, London, 29 Eliz.

(1587)). These disputes paralleled and foreshadowed

modern labor arbitration, which can likewise settle

disputes among multiple parties. See In re U.S. Postal

Serv., Case No. Q15C-4Q-J (May 24, 2022)

(arbitration award resolving jurisdictional dispute

between employer and two competing unions);

Cleveland Wrecking Co. v. Iron Workers Loc. 40, 136

11

F.3d 884, 889 (2d Cir. 1997) (interpreting arbitration

clause to require arbitration of jurisdictional dispute

between employer and multiple unions).

Today, whether arbitration is bilateral or

multilateral is a question of private intent. As one

commentator observed, prior to this Court’s decision

in Green Tree Financial Corporation v. Bazzle, the

weight of authority held that “absent an express

agreement of the parties, there could be no class or

consolidated arbitrations.” Kevin M. Kennedy &

Bethany Appleby, Green Tree Financial Corp. v.

Bazzle: A New Day for Class Arbitrations, 23 Fall

Franc. L. J. 84, 84 (2003) (emphasis added). In Bazzle,

the Court examined the question of whether multiparty so-called “class” arbitrations were “consistent

with the Federal Arbitration Act.” Green Tree Fin.

Corp. v. Bazzle, 539 U.S. 444, 448 (2003). The Court

held that under the FAA, the question of whether a

multi-party arbitration was compelled, permitted, or

prohibited by the terms of an arbitration agreement

covered by the FAA was a question for the arbitrator,

not a court, to decide. Moreover, if there was “doubt

about the matter” it should be resolved “’in favor of

arbitration.’” Id. at 452 (citation omitted). The Ninth

Circuit’s failure to acknowledge this black-letter law

should be reversed.

In sum, the Ninth Circuit’s blanket rule excluding

from FAA coverage anything other than traditional,

bilateral arbitration is undone by the statutory text,

the purpose of FAA, and the absurd results and

unintended consequences which it will entail as a

practical matter. Insofar as the brunt of these

burdens will be placed solely on the shoulders of

countless employers, this Court’s review and reversal

of the Ninth Circuit’s decision is vital.

12

II. THE NINTH CIRCUIT’S APPLICATION OF

CALIFORNIA’S

ARBITRATION-ONLY

SEVERABILITY

DOCTRINE

TREATS

ARBITRATION

AGREEMENTS

LESS

FAVORABLY THAN OTHER CONTRACTS IN

VIOLATION OF THE FAA.

The Court of Appeals likewise erred by affirming

the district court’s application of California’s

severability doctrine, which unlawfully discriminates

against arbitration agreements by singling them out

for disfavored treatment. In doing so, the doctrine

violates this Court’s well-settled precedent that the

FAA preempts—and states may not enforce—rules

that treat arbitration agreements less favorably than

other contracts. See Concepcion, 563 U.S. at 352.

Indeed, this Court previously granted certiorari to

address the lawfulness of California’s arbitration

severability doctrine but was denied the opportunity

to do so when the case settled before oral argument.

See Cert. Pet. I, MHN Gov’t Servs., Inc. v. Zaborowski,

576 U.S. 1095 (2015), dismissed, 578 U.S. 917 (2016).

Amicus respectfully requests that the Court take this

opportunity to revisit the important question it

previously indicated it wished to decide.

A. Application of California’s Severability

Doctrine

Disfavors

Arbitration

Agreements in Violation of the FAA.

Live Nation’s arbitration agreements contain an

express severability clause which provides that in the

event any part of the agreement was “determined to

be illegal, invalid, or unenforceable,” the “remaining

parts shall be deemed valid and enforceable.” See

App. 27a (quoting Terms of Use § 19). It likewise

contains two alternative methods of arbitrating the

13

dispute in the event the preferred arbitrator, New

Deal, is unable to conduct the arbitration for any

reason. See id. (quoting Terms of Use § 17). Yet

despite these express terms, when the district court

determined that some of the terms of the agreement

relating to arbitration with New Deal were

unconscionable, it failed to simply sever those terms,

or compel arbitration via either of the two

alternatives (neither of which was challenged by

plaintiffs or determined to be unconscionable by the

court), relying on the doctrine set forth by the

Supreme Court of California in Armendariz v.

Foundation Health Psychare Services, Inc., 24 Cal.

4th 83, 6 P.3d 669 (Cal. 2000). The Ninth Circuit then

proceeded to affirm the lower court’s decision without

any meaningful analysis. This was reversible error.

In Armendariz, the Supreme Court of California

adopted special rules creating additional barriers for

severability clauses in arbitration agreements but not

in other contracts. Courts applying the Armendariz

doctrine under California law apply a bright-line rule

that discourages severability and instead favors

nullification of the agreement in toto. See 6. P3d at

669. Only when they analyze arbitration agreements

do courts applying Armendiaz examine, as the district

court did here:

(1) whether the substantively unconscionable

provision relates to the arbitration agreement’s

chief objective; (2) whether the arbitration

agreement contained multiple substantively

unconscionable provisions such that it

indicates a systematic effort to impose

arbitration not simply as an alternative to

litigation, but as an inferior forum; and (3) a

lack of mutuality that permeated the entire

14

agreement.” MacClelland v. Cellco P’Ship, 609

F. Supp. 3d 1024 1044 (N.D. Ca. 2022) (citing

Armendariz, 24 Cal. 4th at 124-25). “The

overarching inquiry is whether ‘the interests of

justice… f. [sic] would be furthered’ by

severance.” Armendariz, 24 Cal. 4th at 124

(quoting Beynon v. Garden Grove Med. Grp.,

100 Cal. App. 3d 698, 713, 161 Cal. Rptr. 146

(Ct. App. 1980)).

Application of this doctrine violates well-settled

precedent of this Court. State law rules that purport

to apply to contracts generally are preempted by the

FAA if they disfavor or place burdens on arbitration

agreements that are not applicable to other nonarbitration types of contracts. Concepcion, 563 U.S. at

352. They are likewise unenforceable under the FAA

if they “have a disproportionate impact on arbitration

agreements.” Concepcion, 563 U.S. at 341. Moreover,

when a “generally applicable contract defense,”

applies as a practical matter “only to arbitration” or

otherwise “derive[s] [its] meaning from the fact that

an agreement to arbitrate is at issue” those defenses

are preempted by the FAA. Id. at 1746; see also, e.g.,

Marmet Health Care Ctr., Inc. v. Brown, 565 U.S. 530,

531-34 (2012); Rent-A-Ctr., W., Inc. v. Jackson, 561

U.S. 63, 67-68 (2010); Preston v. Ferrer, 552 U.S. 346,

356 (2008); Buckeye Check Cashing, Inc. v. Cardegna,

546 U.S. 440, 443-44 (2006); Doctor's Assocs., Inc. v.

Casarotto, 517 U.S. 681, 687-88 & n.3 (1996); AlliedBruce Terminix Cos., 513 U.S. at 270-71; Perry v.

Thomas, 482 U.S. 483, 492 n.9 (1987); Southland

Corp. v. Keating, 465 U.S. 1, 16 & n.11 (1984).

Despite numerous and clear expressions of this

fact by this Court, California state courts have long

ignored these principles. Indeed, as noted to this

15

Court as recently as its last term, the Supreme Court

of California has gone so far as to stand the

“disproportionate impact” principle on its head: “A

facially neutral state-law rule,” the court has decided,

“is not preempted simply because its evenhanded

application ‘would have a disproportionate impact on

arbitration agreements.’” Brief Amicus Curiae of

Washington Legal Foundation, Comcast Cable

Communications, LLC v. Ramsey, S. Ct. No. 24-365

(Oct. 28, 2024) at 7 (quoting Sonic-Calabasas A., Inc.

v. Moreno, 311 P.3d 184, 201 (Cal. 2013) (emphasis

added) (quoting Concepcion, 563 U.S. at 342)). And as

petitioners have made clear through compelling

objective evidence, under California’s severance

doctrine, arbitration agreements are 36% more likely

to be fully invalidated than non-arbitration contracts,

and where the “interest of justice” test is applied four

times more likely to be nullified. See Cert. Pet. at 3132 & 102a-128a.

This flies in the face of the “healthy regard for

federal policy favoring arbitration” embodied in the

FAA. Gilmer v. Interstate/Johnson Lane Corp., 500

U.S. 20, 23, 30 (1991). Indeed, Armendiaz has long

been used to invalidate arbitration agreements, both

before and after Concepcion, notwithstanding its

“dubious validity from a preemption standpoint.” E.

Gary Spitko, Federal Arbitration Act Preemption of

State Public-Policy-Based Employment Arbitration

Doctrine: An Autopsy and an Argument for Federal

Agency Oversight, 20 Harv. Negot. L. Rev. 1, 5

(2015) (footnote omitted).

In this case, the district court concluded that the

purportedly unconscionable clauses contained in the

Terms “permeate[d] all aspects of the arbitration

agreement.” Cert. Pet. 93a. The Ninth Circuit, with

16

no analysis, simply invoked Armendariz to ask

“whether the interests of justice would be furthered”

by severance and summarily affirmed the lower

court’s flawed conclusion and refusal to honor the

express terms of the severability clause as the FAA

requires. Cert. Pet. at 28a. By using a state-law

standard that unlawfully stacked the deck against

arbitration agreements as compared to nonarbitration contracts, the Ninth Circuit committed

reversible error. Amicus respectfully requests that

this Court grant certiorari, as it did in the past, and

correct it.

B. This Significance of This Issue Has Only

Grown In this Court Since It Last Granted

Certiorari.

As noted above, in 2015, this Court granted

certiorari to determine whether California’s

arbitration-only severability doctrine violates the

FAA. It was only the settlement of the case raising the

issue that prevented the Court from making a

determination. In the decade since, the importance of

ensuring that arbitration agreements are treated

equally to other non-arbitration contracts and not

routinely, wrongly, and disproportionately vacated

has become dramatically more significant.

The exponential increase in mass arbitrations

since the Court’s decisions in Concepcion and Epic

Systems is well-documented. See, e.g., J. Maria

Glover, Mass Arbitration, 74 Stan. L. Rev. 1283, 1345,

1349 (detailing increase in number of mass

arbitrations and how “astounding” mass arbitration

fees may exert “in terrorem settlement pressure”)

(2022); Andrew Pincus et al., Mass Arbitration

Shakedown: Coercing Unjustified Settlements, U.S.

17

Chamber of Commerce Institute for Legal Reform

(February 2023) at 18–21 (detailing numerous mass

arbitration filings since 2018, including cases were

more than 125,000 [sic] demands for individual

arbitration were filed). California’s severability rule

evidences a deep-seated animus toward arbitration,

and threatens to invalidate and nullify entire

arbitration agreements simply by failing to honor a

bargained-for and agreed-upon severability clause.

Indeed, it was precisely in response to this abuse

of the arbitral system that petitioners adopted

arbitration provisions for adjudicating mass

arbitration provisions modeled on the federal multidistrict litigation “bellwether” approach and

incorporating a fee structure designed to ensure that

mass arbitrations are not used as blackmail for

baseless settlements. See Cert. Pet. at 8–9. In contrast

to the findings of the court, new and flexible modes of

mass arbitration like the bellwether model features

many advantages to both parties to arbitration in

terms of encouraging merits-based resolutions and

ensuring, more expeditious recoveries for meritorious

claims. See Pincus at 51-52 (detailing benefits of

bellwether approach). The Ninth Circuit’s ruling, if

upheld, will undo these and countless other efforts to

combat the threat of mass arbitral blackmail. This

Court should act to ensure that does not occur.

For all of the foregoing reasons Amicus CELC

respectfully submits that this Court should again

grant certiorari as to the question of the continued

vitality of Armendariz and hold that it is preempted

by the FAA under Concepcion.

18

CONCLUSION

The Ninth Circuit’s decision creates immediate

and direct conflicts with the decisions of all of the

circuit courts which have addressed the question at

issue by excluding anything from bilateral arbitration

from FAA coverage and threatens to nullify countless

arbitration agreements that were entered into

knowingly and mutually and are lawful and

enforceable under the FAA.

For the foregoing reasons, the petition for a writ of

certiorari should be granted.

June 12, 2025

Respectfully submitted,

/s/ Alexander T. MacDonald

Alexander T. MacDonald

Counsel of Record

James A. Paretti, Jr.

Workplace Policy Institute

Littler Mendelson, P.C.

815 Connecticut Ave., N.W.

Washington, DC 20006

(202) 842-3400

amacdonald@littler.com

Counsel for Amicus Curiae