Arbitration: 2/5 DCA Majority Decides That FAA Preempts 30 Day Payment Deadline For Employers Under CCP § 1281.97

Dissent Disagrees That FAA Is Offended By Section 1281.97.

               In Hernandez v. Sohnen Enterprises, Inc., Case No. B323303 (2d Dist., Div. 5 May 22, 2024) (published), a 2-1 panel decided that the FAA preempts the CCP § 1281.97 deadline requiring that an arbitration is forfeited unless the employer pays expenses within 30 days unless California arbitration rules are expressly incorporated into the parties’ contract, which coincides somewhat with Justice Wiley’s dissenting rationale in Hohenshelt v. Superior Court, 99 Cal.App.5^th 1319, 1328 (2024), pet’n for review filed, Case No. S284498 (Cal. Sup. Ct. Apr. 8, 2024) [discussed in our March 1, 2024 post].  The dissent did not believe section 1281.97 offended the FAA, siding with the logic of the Gallo decision.  The majority also decided that an order granting a motion to withdraw from arbitration under section 1281.97 was appealable; the dissent questioned whether that was the case, inviting legislative scrutiny, but assumed so for purposes of addressing the FAA preemption issue.  We would adventure a guess that this decision might be destined for California Supreme Court review.