Broughton v. Cigna Healthplans

988 P.2d 67, 90 Cal. Rptr. 2d 334, 21 Cal. 4th 1066, 99 Daily Journal DAR 12141, 99 Cal. Daily Op. Serv. 9431, 1999 Cal. LEXIS 8005, 1999 WL 1080749

• Court: California Supreme Court
• Decided: December 2, 1999
• Docket: S072583
• Status: Published

Opinions

Opinion

MOSK, J.

In this case we consider whether a claim brought under the Consumers Legal Remedies Acts, Civil Code section 1750 et seq. (CLRA or the Act), may be subject to arbitration. The Court of Appeal concluded that such a claim would not be arbitrable, principally because the CLRA authorizes permanent injunctive relief to enjoin deceptive business practices, and such a remedy is beyond the scope of an arbitrator to grant or properly enforce. We conclude that the Court of Appeal is partially correct that the injunctive relief portion of a CLRA claim is inarbitrable, although for reasons somewhat different from those found by the Court of Appeal. But we also conclude that an action for damages under the CLRA is fully arbitrable and should be severed from an injunctive relief action when, as here, a plaintiff requests both types of relief.

I. Statement of Facts and Procedural Background

Plaintiffs are a minor, Adrian Broughton, Jr., through his guardian ad litem, Keya Johnson (his mother), and Ms. Johnson on her own behalf. Adrian and his mother were covered by Medi-Cal, which had negotiated a contract with Cigna Healthplans of California (Cigna) for health care coverage. The first cause of action in the complaint against Cigna and others, not parties to the appeal, seeks damages for medical malpractice, based on severe injuries claimed to have been suffered by Adrian at birth. The second cause of action alleges violation of the CLRA, based on allegations that Cigna deceptively and misleadingly advertised the quality of medical services which would be provided under its health care plan. Specifically, plaintiffs allege that Ms. Johnson received substandard prenatal medical services, and that she was denied a medically necessary cesarean delivery. Under the second cause of action plaintiffs ask for actual damages, punitive damages, attorneys fees and “an order enjoining [Cigna’s] deceptive methods, acts, and practices.”

Cigna answered the complaint and filed a combined motion to compel arbitration and verified petition for an order requiring plaintiffs to arbitrate the controversy. Cigna relied on the mandatory arbitration provision in its combined evidence of coverage and disclosure form.

Plaintiffs opposed the motion. They argued that there was no evidence of an agreement to arbitrate between them and Cigna, the case did not come within the statutes governing arbitration of medical malpractice claims, Cigna waived the right to arbitrate by litigating motions before the trial court, and the second cause of action under the CLRA was not subject to arbitration. In support of the last argument, plaintiffs cited Civil Code section 1751,¹ a part of the Act: “Any waiver by a consumer of the provisions of this title is contrary to public policy and shall be unenforceable and void.”

The trial court severed the causes of action and granted the motion to compel arbitration of the medical malpractice cause of action, but denied the motion as to the cause of action under the CLRA. Cigna filed a timely notice of appeal from the order denying its motion to compel arbitration of the second cause of action for violation of the CLRA.

The Court of Appeal affirmed the trial court’s judgment. It pointed to the CLRA antiwaiver provision and to the fact that the statute authorizes the granting of permanent injunctions against deceptive business practices. The court reasoned, as explained at greater length below, that arbitrators may not issue permanent injunctions, and therefore arbitration' is not an adequate forum for the resolution of CLRA claims. We granted review to decide whether CLRA claims are arbitrable, and we also requested the parties to address the question whether a conclusion that an agreement to arbitrate CLRA claims is unenforceable would run afoul of the Federal Arbitration Act (9 U.S.C. § 1 et seq. (FAA)).²

II. Discussion

We begin our discussion by recapitulating the federal statutory mandate and strong public policy in favor of enforcing arbitration agreements. Section 2 of the FAA provides: “A written provision in . . .a contract evidencing a transaction involving [interstate] commerce to settle by arbitration the controversy thereafter arising out of such contract or transaction, . . . 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, and section 2 in particular, “was intended to ‘revers[e] centuries of judicial hostility to arbitration agreements,’ [citation] by ‘placing] arbitration agreements “upon the same footing as other contracts.” ’ ” (Shearson/American Express, Inc. v. McMahon (1987) 482 U.S. 220, 225-226 [107 S.Ct. 2332, 2337, 96 L.Ed.2d 185] (McMahon).) Through the FAA, “Congress precluded States from singling out arbitration provisions for suspect status . . . .” (Doctor’s Associates, Inc. v. Casarotto (1996) 517 U.S. 681, 687 [116 S.Ct. 1652, 1656, 134 L.Ed.2d 902] [striking down state law requiring special notice for arbitration provisions in contracts].) California has a similar statute (Code Civ. Proc., § 1281) and a similar policy in favor of arbitration. (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 9-10 [10 Cal.Rptr.2d 183, 832 P.2d 899] (Moncharsh).)

Over the past 15 years, the United States Supreme Court has on numerous occasions invalidated laws and judicial decisions that disfavored arbitration. The seminal case of Southland Corp. v. Keating (1984) 465 U.S. 1 [104 S.Ct. 852, 79 L.Ed.2d 1] (Southland) reversed one of our own cases. We had decided in Keating v. Superior Court (1982) 31 Cal.3d 584 [183 Cal.Rptr. 360, 645 P.2d 1192] (Keating) that certain claims under California’s Franchise Investment Law (Corp. Code, § 31000 et seq.) were not subject to mandatory arbitration pursuant to a provision in a franchise agreement. The Franchise Investment Law had an antiwaiver provision similar to the one in this case, which we construed as an expression of a legislative intent to limit enforcement of the statute to the courts rather than arbitration. This limitation was warranted, we reasoned, because “the effectiveness of the statute ‘is lessened in arbitration as compared to judicial proceedings’ [citation] in part because of the limited nature of judicial review [citation].” (Keating, supra, 31 Cal.3d at p. 596.) The United States Supreme Court held that the Franchise Investment Law, so interpreted, violated the FAA. As the court stated: “In enacting § 2 of the [FAA], Congress declared a national policy favoring arbitration and withdrew 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, supra, 465 U.S. at p. 10 [104 S.Ct. at p. 858].)

In Perry v. Thomas (1987) 482 U.S. 483 [107 S.Ct. 2520, 96 L.Ed.2d 426], the high court held California Labor Code section 229, which insulated claims regarding the collection of wages from agreements to arbitrate, was preempted by section 2 of the FAA. As the court explained: “An agreement to arbitrate is valid, irrevocable, and enforceable, as a matter of federal law, [citation] ‘save upon such grounds as exist at law or in equity for the revocation of any contract.’ 9 U. S. C. § 2. . . . Thus state law, whether of legislative or judicial origin, is applicable if that law arose to govern issues concerning the validity, revocability, and enforceability of contracts generally. A state-law principle that takes its meaning precisely from the fact that a contract to arbitrate is at issue does not comport with this requirement of § 2. [Citations.] A court may not, then, in assessing the rights of litigants to enforce an arbitration agreement, construe that agreement in a manner different from that in which it otherwise construes nonarbitration agreements under state law.” (Perry v. Thomas, supra, 482 U.S. at pp. 492-493, fn. 9 [107 S.Ct. at p. 2527].)

Since Southland and Perry, the court has repeatedly made clear that arbitration may resolve statutory claims as well as those purely contractual if the parties so intend, and that in doing so, the parties do not forego substantive rights, but merely agree to resolve them in a different forum. (Mitsubishi Motors v. Soler Chrysler-Plymouth (1985) 473 U.S. 614, 627 [105 S.Ct. 3346, 3354, 87 L.Ed.2d 444] (Mitsubishi Motors) [claims regarding federal antitrust statutes subject to arbitration]; McMahon, supra, 482 U.S. 220 [Securities Exchange Act of 1934 and Racketeer Influenced and Corrupt Organizations Act claims subject to arbitration]; Rodriguez de Quijas v. Shearson/Am. Exp. (1989) 490 U.S. 477 [109 S.Ct. 1917, 104 L.Ed.2d 526] [claims arising from Securities Act of 1933 arbitrable, overruling previous construction of the antiwaiver provisions of that act in Wilko v. Swan (1953) 346 U.S. 427 [74 S.Ct. 182, 98 L.Ed. 168]]; Gilmer v. Interstate/Johnson Lane Corp. (1991) 500 U.S. 20 [111 S.Ct. 1647, 114 L.Ed.2d 26] (Gilmer) [Age Discrimination in Employment Act (ADEA) claim arbitrable].)

Notwithstanding all of the above, the United States Supreme Court has acknowledged that “not ... all controversies implicating statutory rights are suitable for arbitration.” (Mitsubishi Motors, supra, 473 U.S. at p. 627 [105 S.Ct. at p. 3354].) The unsuitability of a statutory claim for arbitration turns on congressional intent, which can be discovered in the text of the statute in question, its legislative history or in an “ ‘inherent conflict’ between arbitration and the [statute’s] underlying purposes.” (Gilmer, supra, 500 U.S. at p. 26 [111 S.Ct. at p. 1652].) Although the court has not elaborated on the phrase “inherent conflict,” two cases shed light on its meaning.

In Mitsubishi Motors, supra, 473 U.S. 614, the court considered, within the context of enforcement of an international agreement, whether statutory antitrust claims are subject to arbitration. The court rejected the argument articulated in that case by the Court of Appeals that the claim was not arbitrable because “ ‘ “[a] claim under the antitrust laws is not merely a private matter. The Sherman Act is designed to promote the national interest in a competitive economy; thus, the plaintiff asserting his rights under the Act has been likened to a private attorney-general who protects the public’s interest.” ’ [Citation.]” (Id. at p. 635 [105 S.Ct. at p. 3358].) The court stated: “The treble-damages provision wielded by the private litigant is a chief tool in the antitrust enforcement scheme, posing a crucial deterrent to potential violators. [Citation.] ft[] The importance of the private damages remedy, however, does not compel the conclusion that it may not be sought outside an American court. Notwithstanding its important incidental policing function, the treble-damages cause of action conferred on private parties by § 4 of the Clayton Act, 15 U. S. C. § 15, . . . seeks primarily to enable an injured competitor to gain compensation for that injury. fl[] ‘. . .Of course, treble damages also play an important role in penalizing wrongdoers and deterring wrongdoing, as we also have frequently observed. ... It nevertheless is true that the treble-damages provision, which makes awards available only to injured parties, and measures the awards by a multiple of the injury actually proved, is designed primarily as a remedy.’ ” (Id. at pp. 635-636 [105 S.Ct. at p. 3358], italics added.)

In McMahon, supra, 482 U.S. 220, the court considered a similar argument with respect to the Racketeer Influenced and Corrupt Organizations Act (RICO). The plaintiffs in that case, who brought various federal and state claims against a brokerage firm, had argued that “the public interest in the enforcement of RICO precludes its submission to arbitration.” (Id. at p. 240 [107 S.Ct. at p. 2344].) The court, after citing Mitsubishi Motors, stated: “RICO’s drafters . . . sought to provide vigorous incentives for plaintiffs to pursue RICO claims that would advance society’s fight against organized crime. [Citation.] But in fact RICO actions are seldom asserted ‘against the archetypal, intimidating mobster.’ [Citations] (‘[0]nly 9% of all civil RICO cases have involved allegations of criminal activity normally associated with professional criminals’). The special incentives necessary to encourage civil enforcement actions against organized crime do not support nonarbitrability of run-of-the-mill civil RICO claims brought against legitimate enterprises. The private attorney general role for the typical RICO plaintiff is simply less plausible than it is for the typical antitrust plaintiff, and does not support a finding that there is an irreconcilable conflict between arbitration and enforcement of the RICO statute.” (Id. at pp. 241-242 [107 S.Ct. at p. 2345].)

The Mitsubishi Motors and McMahon courts’ rejection of what may be termed the “public interest” argument in the above cases revolves around the essentially private nature of the damages remedy at issue—the public benefits of the antitrust and civil RICO suit are merely incidental to the pursuit of a private remedy, making the “private attorney general role” for such plaintiffs relatively “implausible.” The above passages imply, however, that when the primary purpose and effect of a statutory remedy is not to compensate for an individual wrong but to prohibit and enjoin conduct injurious to the general public, i.e., when the plaintiff is acting authentically as a private attorney general, such a remedy may be inherently incompatible with arbitration.

Is there an inherent conflict between arbitration and the CLRA? In order to answer that question, we first look to the nature and purpose of that statute. The CLRA was enacted in an attempt to alleviate social and economic problems stemming from deceptive business practices, which were identified in the 1969 Report of the National Advisory Commission on Civil Disorders (i.e., the Kemer Commission). (See Reed, Legislating for the Consumer: An Insider’s Analysis of the Consumers Legal Remedies Act (1971) 2 Pacific LJ. 1, 5-7.) Section 1760 contains an express statement of legislative intent: “This title shall be liberally construed and applied to promote its underlying purposes, which are to protect consumers against unfair and deceptive business practices and to provide efficient and economical procedures to secure such protection.”

Specifically, the CLRA identifies as actionable certain deceptive business practices. (§ 1770.) The practices include, for example, “[rjepresenting that goods are original or new if they have deteriorated unreasonably or are altered, reconditioned, reclaimed, used, or secondhand” (§ 1770, subd. (a)(6)) or “[advertising goods or services with intent not to sell them as advertised” (§ 1770, subd. (a)(9)). It permits a consumer who has been damaged by these deceptive practices to bring an action for actual damages, including a class action suit, as well as for “an order enjoining a method, act, or practice,” and punitive damages. (§ 1780, subd. (a).) The court is also mandated to award the prevailing plaintiff court costs and attorneys fees, and reasonable attorneys fees to the prevailing defendant upon a finding that a plaintiff’s prosecution was not in good faith. (§ 1780, subd. (d).) The statute further provides that its remedies are “not exclusive” but rather “in addition to any other procedures or remedies ... in any other law.” (§ 1752.) And as mentioned, the Act also expressly provides that its protections may not be waived by the consumer. (§ 1751.)

In deciding whether CLRA claims are arbitrable, we first dispose of plaintiffs’ contention that section 2 of the FAA does not apply to their agreement with Cigna because the terms of that agreement purport to incorporate the rules of the California Arbitration Act (Code Civ. Proc., § 1280 et seq.), citing Volt Info. Sciences v. Leland Stanford Jr. U. (1989) 489 U.S. 468 [109 S.Ct. 1248, 103 L.Ed.2d 488]. We disagree.

Even assuming arguendo that California’s statute embodies a less strict standard for enforcing arbitration agreements than does the FAA, section 2 of the FAA applies regardless of which law the arbitration agreement incorporates. As the court recently stated in Doctors Associates, Inc. v. Casarotto, supra, 517 U.S. at page 688 [116 S.Ct. at pages 1656-1657]: “Volt involved an arbitration agreement that incorporated state procedural rules, one of which, on the facts of that case, called for arbitration to be stayed pending the resolution of a related judicial proceeding [unlike section 4 of the FAA, which would not permit such a stay]. The state rule examined in Volt determined only the efficient order of proceedings; it did not affect the enforceability of the arbitration agreement itself. We held that applying the state rule would not ‘undermine the goals and policies of the FAA,’ [citation], because the very purpose of the Act was to ‘ensur[e] that private agreements to arbitrate are enforced according to their terms . . . .’” (Italics added.) The Doctors Associates court struck down a state law that did affect the enforceability of arbitration agreements by requiring special notice for arbitration provisions in contracts, because the law “singl[ed] out arbitration provisions for suspect status.” (Doctors Associates, Inc. v. Casarotto, supra, 517 U.S. at p. 687 [116 S.Ct. at p. 1656].) As Doctors Associates makes clear, Volt, supra, 489 U.S. 468, did not alter the rule that states may not disfavor arbitration agreements, whether those agreements explicitly incorporate the provisions of the FAA or some other arbitration regime.³ The policy favoring enforcement of arbitration agreements embodied in section 2 of the FAA fully applies in this case provided, as discussed below, that the parties to the arbitration were in a transaction involving interstate commerce.⁴

Plaintiffs’ main arguments that CLRA claims are not suitable for arbitration revolve around the Act’s injunctive relief provision. As noted, they sought injunctive relief as well as damages in their CLRA claim. Following the Court of Appeal, they argue that they cannot “vindicate [their CLRA claim] in the arbitral forum” because of an arbitrator’s supposed lack of authority to grant permanent injunctive relief.

Plaintiffs contend that arbitrators may not issue permanent injunctions principally because an arbitrator has no authority to vacate or modify an injunction. They correctly point out that a superior court has the power “to modify or vacate its [injunctive] decree when the ends of justice will be thereby served,” notwithstanding the rule regarding finality of judgments. (Sontag Chain Stores Co. v. Superior Court (1941) 18 Cal.2d 92, 95 [113 P.2d 689].) “Such a decree, it has uniformly been held, is always subject, upon a proper showing, to modification or dissolution by the court which rendered it. The court’s power in this respect is an inherent one.” (Id. at pp. 94-95.) Grounds for modification or dissolution include supervening changes in fact or law. (See Welsch v. Goswick (1982) 130 Cal.App.3d 398, 404-405 [181 Cal.Rptr. 703].) Plaintiffs argue that arbitrators have no comparable authority because they lose all ability to conrect or otherwise modify arbitration awards 30 days after service of the award. (Code Civ. Proc., § 1284.) Plaintiffs also contend that the superior court is without statutory authority to modify or dissolve an arbitral injunction, being confined to review an arbitration award on a narrow basis at the time it is petitioned to confirm the award. (Id., § 1286.2; Moncharsh, supra, 3 Cal.4th at p. 11.)

Plaintiffs cite Marsch v. Williams (1994) 23 Cal.App.4th 238 [28 Cal.Rptr.2d 402] in support of their position. In that case the court held that an arbitrator had no authority to appoint a receiver, in part because of the critical role the superior court plays in supervising receivers (id. at p. 248), and plaintiffs claim the superior court must play a similar supervisorial role vis-a-vis permanent injunctions. Plaintiffs also argue that the fact that arbitrators are without authority to enforce their own injunctions (see Luster v. Collins (1993) 15 Cal.App.4th 1338, 1349 [19 Cal.Rptr.2d 215]) makes such injunctions unworkable.

Cigna disagrees, citing Swan Magnetics, Inc. v. Superior Court (1997) 56 Cal.App.4th 1504 [66 Cal.Rptr.2d 541]. That case concerned whether a trial court had the authority to modify an arbitrator’s injunction prohibiting the manufacture of a product in contravention of a licensing agreement. The Swan court concluded that an arbitrator’s injunction, like a superior court injunction, is inherently subject to modification or vacation. (Id. at p. 1510.) The Swan court envisioned the modification or vacation occurring through the initiation of a new arbitration proceeding. (Id. at pp. 1511-1512.)

We need not decide the broad question framed by the Court of Appeal and by plaintiffs as to whether an arbitrator may ever issue a permanent injunction. We conclude on narrower grounds that the injunction plaintiffs seek in the present case is indeed beyond the arbitrator’s power to grant. The CLRA plaintiff in this case is functioning as a private attorney general, enjoining future deceptive practices on behalf of the general public. We hold that under such circumstances arbitration is not a suitable forum, and the Legislature did not intend this type of injunctive relief to be arbitrated.

Our path to that conclusion begins by recalling that the purpose of arbitration is to voluntarily resolve private disputes in an expeditious and efficient manner. (See Moncharsh, supra, 3 Cal.4th at pp. 10-11; Dean Witter Reynolds Inc. v. Byrd (1985) 470 U.S. 213, 221 [105 S.Ct. 1238, 1242-1243, 84 L.Ed.2d 158].) Parties to arbitration voluntarily trade the formal procedures and the opportunity for greater discovery and appellate review for “ ‘the simplicity, informality, and expedition of arbitration.’ ” (Gilmer, supra, 500 U.S. at p. 31 [111 S.Ct. at p. 1655]; see also Moncharsh, supra, 3 Cal.4th at pp. 11-12.)

On the other hand, the evident purpose of the injunctive relief provision of the CLRA is not to resolve a private dispute but to remedy a public wrong. Whatever the individual motive of the party requesting injunctive relief, the benefits of granting injunctive relief by and large do not accrue to that party, but to the general public in danger of being victimized by the same deceptive practices as the plaintiff suffered. In this important respect, the injunctive relief at issue in this case differs from the antitrust treble damages remedy considered in Mitsubishi Motors, supra, 473 U.S. at pages 635-636 [105 S.Ct. at pages 3358-3359], in which any public benefit was merely incidental to private compensation.⁵ In other words, the plaintiff in a CLRA damages action is playing the role of a bona fide private attorney general. (McMahon, supra, 482 U.S. at pp. 241-242 [107 S.Ct. at p. 2345-2346].)

In addition to the fact that the injunction is for the public benefit, we are cognizant of the evident institutional shortcomings of private arbitration in the field of such public injunctions. Even those courts that have generally affirmed the ability of arbitrators to issue injunctions acknowledge that the modification or vacation of such injunctions involves the cumbersome process of initiating a new arbitration proceeding. (See Swan Magnetics, Inc. v. Superior Court, supra, 56 Cal.App.4th at pp. 1511-1512.) While these procedures may be acceptable when all that is at stake is a private dispute by parties who voluntarily embarked on arbitration aware of the trade-offs to be made, in the case of a public injunction, the situation is far more problematic. The continuing jurisdiction of the superior court over public injunctions, and its ongoing capacity to reassess the balance between the public interest and private rights as changing circumstances dictate, are important to ensuring the efficacy of such injunctions. In some cases, the continuing supervision of an injunction is a matter of considerable complexity. (See, e.g., Board of Ed. of Oklahoma City v. Dowell (1991) 498 U.S. 237 [111 S.Ct. 630, 112 L.Ed.2d 715] [regarding dissolution of a long-standing desegregation decree].) Indeed, in such cases, judges may assume quasi-executive functions of public administration that expand far beyond the resolution of private disputes. (Ibid.) Arbitrators, on the other hand, in addition to being unconstrained by judicial review, are not necessarily bound by earlier decisions of other arbitrators in the same case. Thus, a superior court that retains its jurisdiction over a public injunction until it is dissolved provides a necessary continuity and consistency for which a series of arbitrators is an inadequate substitute.

Furthermore, we recently held that an arbitration award does not have collateral estoppel effect in favor of nonparties to an arbitration unless the arbitral parties so agree. (Vandenberg v. Superior Court (1999) 21 Cal.4th 815, 836-837 [88 Cal.Rptr.2d 366, 982 P.2d 229].) Thus, if an arbitrator issued an injunction under the CLRA prohibiting a certain deceptive practice, and if that injunction were imperfectly enforced, another consumer plaintiff also seeking to enjoin the practice would have to relitigate it. In other words, only the parties to the injunction would be able to enforce it, although the injunction is public in scope. Therefore, an arbitral injunction would be more difficult to enforce, and would be a less effective means of achieving the CLRA’s goal of enjoining deceptive business practices.

Moreover, it hardly requires elaboration that superior court judges are accountable to the public in ways arbitrators are not. Superior court judges are constitutional officers (Cal. Const., art. VI, § 4) who are sworn to uphold the United States and California Constitutions (id., art. XX, § 3). They are locally elected (id., art. VI, § 16, subd. (b)) and may be recalled (id., art. II, § 14, subd. (b)). They are subject to discipline by a public body, the Commission on Judicial Performance. (Id., art. VI, § 18.) Virtually all of their proceedings take place in public view. (See NBC Subsidiary (KNBC-TV), Inc. v. Superior Court (1999) 20 Cal.4th 1178 [86 Cal.Rptr.2d 778, 980 P.2d 337].) Their decisions are subject to appellate review. By contrast, arbitrators are not public officers and are in no way publicly accountable. Their proceedings take place in private. They are subject to minimal appellate review. (Moncharsh, supra, 3 Cal.4th at p. 11.) There can be little doubt that publicly accountable judges, rather than arbitrators, are the most appropriate overseers of injunctive remedies explicitly designed for public protection.

In short, there are two factors taken in combination that make for an “inherent conflict” between arbitration and the underlying purpose of the CLRA’s injunctive relief remedy. First, that relief is for the benefit of the general public rather than the party bringing the action. (Mitsubishi Motors, supra, 473 U.S. at pp. 635-636 [105 S.Ct. at pp. 3358-3359]; McMahon, supra, 482 U.S. at pp. 241-242 [107 S.Ct. at pp. 2345-2346].) Second, the judicial forum has significant institutional advantages over arbitration in administering a public injunctive remedy, which as a consequence will likely lead to the diminution or frustration of the public benefit if the remedy is entrusted to arbitrators. Given this inherent conflict, we will presume, absent indications to the contrary, that the Legislature did not intend that the injunctive relief claims be arbitrated. (See Gilmer, supra, 500 U.S. at p. 26 [111 S.Ct. at p. 1652].)⁶ We discern no such indications in this case, and indeed, the language of the statute suggests the contrary. Section 1780, subdivision (c) prescribes that the CLRA action be filed in “any court. . . having jurisdiction of the subject matter.” (Italics added.)⁷

Nor do we believe that this interpretation of the CLRA contravenes the FAA. As discussed, the United States Supreme Court recognizes an “inherent conflict” exception to the arbitrability of federal statutory claims. (Gilmer, supra, 500 U.S. at p. 26 [111 S.Ct. at p. 1652].) The discussion in Gilmer and the other cases cited above, it is true, occurred in the context of an inquiry into whether Congress had intended federal statutory claims to be exempt from arbitration. “Just as it is the congressional policy manifested in the Federal Arbitration Act that requires courts liberally to construe the scope of arbitration agreements covered by that Act, it is the congressional intention expressed in some other statute on which the courts' must rely to identify any category of claims as to which agreements to arbitrate will be held unenforceable.” (Mitsubishi Motors, supra, 473 U.S. at p. 627 [105 S.Ct. at p. 3354].) But although the court has stated generally that the capacity to withdraw statutory rights from the scope of arbitration agreements is the prerogative solely of Congress, not state courts or legislatures (Southland, supra, 465 U.S. at p. 18 [104 S.Ct. at p. 862]), it has never directly decided whether a legislature may restrict a private arbitration agreement when it inherently conflicts with a public statutory purpose that transcends private interests. In the present case, as discussed, we believe there is such an inherent conflict between arbitration and a statutory injunctive relief remedy designed for the protection of the general public. Although both California and federal law recognize the important policy of enforcing arbitration agreements, it would be perverse to extend the policy so far as to preclude states from passing legislation the purposes of which make it incompatible with arbitration, or to compel states to permit the vitiation through arbitration of the substantive rights afforded by such legislation.

In other terms, our holding does not represent a “ ‘suspicion of arbitration as a method of weakening the protections afforded in the substantive law to would-be complainants’ . . . ‘out of step with our current strong endorsement of the federal statutes favoring this method of resolving disputes’ ” (Gilmer, supra, 500 U.S. at p. 30 [111 S.Ct. at p. 1654]). Rather, it is a recognition that arbitration cannot necessarily afford all the advantages of adjudication in the area of private attorney general actions, that in a narrow class of such actions arbitration is inappropriate, and that this inappropriateness does not turn on the happenstance of whether the rights and remedies being adjudicated are of state or federal derivation.

Nor does anything in the legislative history of the FAA suggest that Congress contemplated “public injunction” arbitration to be within the universe of arbitration agreements it was attempting to enforce. Indeed, the primary focus of the drafters of the FAA appears to have been on the utility of arbitration in resolving ordinary commercial disputes. (See Schwartz, Enforcing Small Print to Protect Big Business: Employee and Consumer Rights Claims in an Age of Compelled Arbitration, (1997) Wis. L.Rev. 33, 75-78; Cohen & Dayton, The New Federal Arbitration Law (1926) 12 Va. L.Rev. 265, 285.) Although the court has interpreted the FAA to extend to noncommercial statutory claims, it is doubtful Congress would have envisioned the extension of the FAA to enforce arbitral jurisdiction over a public injunction.⁸

Our bolding that a CLRA injunctive relief action is not subject to arbitration does not necessarily lead to the conclusion that a CLRA action for damages is likewise inarbitrable. On the contrary, as Mitsubishi Motors, McMahon, Gilmer and other cases cited above make clear, statutory damages claims are fully arbitrable. Such an action is primarily for the benefit of a party to the arbitration, even if the action incidentally vindicates important public interests. (Mitsubishi Motors, supra, 473 U.S. at pp. 635-636 [105 S.Ct. at p. 3358-3359].) In the context of statutory damages claims, the United States Supreme Court has consistently rejected plaintiffs’ arguments that abbreviated discovery, arbitration’s inability to establish binding precedent, and a plaintiff’s right to a jury trial render the arbitral forum inadequate, or that submission of resolution of the claims to arbitration is in any sense a waiver of the substantive rights afforded by statute. (See Gilmer, supra, 500 U.S. at pp. 31-32 [111 S.Ct. at p. 1654-1655]; Mitsubishi Motors, supra, 473 U.S. at p. 627 [105 S.Ct. at p. 3354].) “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, supra, 473 U.S. at p. 628 [105 S.Ct. at p. 3354].)

Thus, although the CLRA might be interpreted to mean that the damages remedy under the Act is to be resolved solely in a judicial forum (see Keating, supra, 31 Cal.3d 584), we construe the Act as consistent with the FAA (see People v. Superior Court (Romero) (1996) 13 Cal.4th 497, 509 [53 Cal.Rptr.2d 789, 917 P.2d 628] [presuming a legislative intent that a statute be constitutional]). We therefore interpret the CLRA as permitting arbitration of damages claims, at least to the extent the FAA governs such claims.

Moreover, although as noted, the CLRA does not address the question of arbitrability directly, the provisions of the statute itself imply that a distinction between an arbitrable request for damages and an inarbitrable request for injunctive relief is warranted. In Gilmer, the court suggested that a statute such as the ADEA that promotes “ ‘informal methods of conciliation, conference, and persuasion,’ ” is consistent with arbitration. (Gilmer, supra, 500 U.S. at p. 29 [111 S.Ct. at p. 1654]; 29 U.S.C. § 626(b).) The CLRA promotes such informal methods by requiring a consumer to notify those alleged to have committed deceptive practices at least 30 days prior to commencing an action for damages, and by providing that the consumer may not recover damages if appropriate correction, repair, replacement or other remedy is given. (See §§ 1782, subds. (a)-(c), 1784.) However, section 1782, subdivision (d), provides that an action for injunctive relief may be brought without giving such notice and waiting for such remediation. These differing approaches to actions for damages and for injunctive relief reflect the differing purposes of the two actions. The former is primarily to remedy individual wrongs, and prescribes methods short of litigation to accomplish this. The latter is for the protection of the public, and does not prescribe informal methods of resolution that would compromise that protective purpose. These divergent approaches and purposes are consistent with the conclusion that a CLRA action for damages is amenable to arbitration but an action for injunctive relief is not.

Plaintiffs contend that neither damages nor injunctive relief under the CLRA is subject to arbitration. They argue that insofar as the FAA would prevent states from delegating to state courts exclusively the task of enforcing a particular statute, it is in violation of the Tenth Amendment of the United States Constitution, citing Printz v. United States (1997) 521 U.S. 898 [117 S.Ct. 2365, 138 L.Ed.2d 914], In that case, the court reviewed the constitutionality of a provision within the Brady Handgun Violence Prevention Act that required local law enforcement officers to conduct federally mandated background checks on prospective gun owners. The court concluded, under the Tenth Amendment and other provisions of our dual federalist governmental structure, that “the Federal Government may not compel the States to implement, by legislation or executive action, federal regulatory programs.” (521 U.S. at p. 925 [117 S.Ct. at p. 2379].) In the present case, no such implementation “by legislation or executive action,” is at issue. Rather, all that is involved is the enforcement of a preemptive federal statute, the FAA, in state court. Print? did not alter the general rules of federal supremacy or the enforcement of federal law in state court, nor affect the broad applicability of the FAA to contracts for arbitration, which had been reaffirmed a year before Printz in Doctors Associates, Inc. v. Casarotto, supra, 517 U.S. 681.⁹

Plaintiffs also claim that arbitration of any CLRA claim would waive an important statutory right to judicial review, citing in particular our decision in Moncharsh, supra, 3 Cal.4th 1, that an arbitration award cannot be vacated because of evident factual or legal error. In Moncharsh, we stated that the risk that an arbitrator’s decision will be premised on an error of law or fact is acceptable, in part, because “by voluntarily submitting to arbitration, the parties have agreed to bear that risk in return for a quick, inexpensive, and conclusive resolution to their dispute.” (Id. at p. 11.) Plaintiffs argue that when the subject of arbitration is an unwaivable statutory right promoting an important public interest, as it is in this case, it is beyond the power of the contracting parties to take that risk of an erroneous legal decision.

Plaintiffs’ claim is premature. As the United States Supreme Court has stated: “[Ajlthough judicial scrutiny of arbitration awards necessarily is limited, such review is sufficient to ensure that arbitrators comply with the requirements of the statute” at issue. (McMahon, supra, 482 U.S. at p. 232 [107 S.Ct. at p. 2340].) The question whether the precise standard of judicial review articulated in Moncharsh “is sufficient to ensure that arbitrators comply” with unwaivable statutory requirements does not bear on whether that claim is arbitrable ab initio. Rather, that question pertains to the precise standard by which an arbitrator’s award of damages under the CLRA will be reviewed by the court petitioned to confirm the arbitration award. It can only be raised, therefore, at the time a party seeks such confirmation. (See Code Civ. Proc., § 1286.2.) We decline to address such an unripe claim here.

Plaintiffs also argue that arbitration costs and attorneys fees mandated for a prevailing plaintiff in a CLRA claim (see § 1780, subd. (d)) would not be available under arbitration, and for that reason arbitration of the claim would foreclose important remedies provided under the Act. In support of their contention they cite Code of Civil Procedure section 1284.2, which declares that “each party to the arbitration shall pay his pro rata share of the expenses and fees of the neutral arbitrator” and bear his own attorneys fees unless “the arbitration agreement otherwise provides.”

We agree with plaintiffs that the availability of costs and attorneys fees to prevailing plaintiffs is integral to making the CLRA an effective piece of consumer legislation, increasing the financial feasibility of bringing suits under the statute. (See Enrolled Bill Rep. on Assem. Bill No. 3756 (1987-1988 Reg. Sess.) p. 3.) When we construe potentially conflicting statutes, our duty is to harmonize them if reasonably possible. (County of San Bernardino v. City of San Bernardino (1997) 15 Cal.4th 909, 933 [64 Cal.Rptr.2d 814, 938 P.2d 876].) Here any potential conflict between the California Arbitration Act and the CLRA is easily resolved when we reognize that Code of Civil Procedure section 1284.2 is simply a default provision. When parties agree to resolve statutory claims through arbitration, it is reasonable to infer that they consent to abide by the substantive and remedial provisions of the statute. (See Kamakazi Music Corp. v. Robbins Music Corp., supra, 684 F.2d at p. 231.) Otherwise, a party would not be able to fully “ ‘vindicate [his or her] statutory cause of action in the arbitral forum.’ ” (Gilmer, supra, 500 U.S. at pp. 27-28 [111 S.Ct. at p. 1653].) We therefore interpret Code of Civil Procedure section 1284.2 as giving way to the remedial provisions of the CLRA when parties have agreed to arbitrate claims under that statute. As such, Code of Civil Procedure section 1284.2 presents no barrier to the enforcement of an arbitration agreement containing a CLRA claim.¹⁰

Finally, plaintiffs claim that the FAA applies only to interstate commerce, and interstate commerce was not at issue here. If the FAA does not apply, then California law might arguably have a less stringent standard for enforcing agreements to arbitrate unwaivable statutory claims. (See Keating, supra, 31 Cal.3d 584.) We note that the definition of interstate commerce under the FAA is as broad as under the commerce clause of the United States' Constitution. (See Allied-Bruce Terminix Cos. v. Dobson (1995) 513 U.S. 265 [115 S.Ct. 834, 130 L.Ed.2d 753].) Nonetheless, it is true that the issue of the applicability of the FAA was not raised below, and so the question whether the contract between plaintiffs and Cigna was a “contract evidencing a transaction involving commerce” under section 2 of the FAA (9 U.S.C. § 2) has not been litigated. We therefore remand for consideration of this question, and, if it is concluded that section 2 of the FAA does not apply, whether California law warrants a different result on the question of arbitrability of CLRA damages claims.

United States Supreme Court case law makes clear that when a suit contains both arbitrable and inarbitrable claims, the arbitrable claims should be severed from those that are inarbitrable and sent to arbitration. (Dean Witter Reynolds Inc. v. Byrd, supra, 470 U.S. at p. 221 [105 S.Ct. at pp. 1242-1243].) This is so even when severance leads to inefficiency. (Ibid.) In the present case, we are concerned not with distinct arbitrable and inarbitrable claims, but with arbitrable and inarbitrable remedies derived from the same statutory claim. Yet we believe the logic of Byrd still applies. Given the strong policy in both federal and state law for arbitrating private disputes, and given the inherent unsuitability of arbitration as a means of resolving plaintiffs’ action for injunctive relief under the CLRA, the injunctive relief action alone should be decided in a judicial forum. Therefore, assuming the damages portion of the CLRA claim is found to be arbitrable under the arbitration agreement and subject to the FAA or otherwise arbitrable under California law, it should be resolved, together with the malpractice claim, in arbitration.

III. Disposition

For all of the foregoing, we affirm the judgment of the Court of Appeal in part and reverse in part, and remand the cause for proceedings consistent with this opinion.

George, C. J., Baxter, J., and Werdegar, J., concurred.

1 A11 statutory references are to the Civil Code unless otherwise indicated.

2 In limiting the issues on which we granted review, we have not considered an issue plaintiffs raised below: whether the government can, on behalf of Medi-Cal recipients, agree to arbitration and waive the recipients’ right to a jury trial as a condition of receiving Medi-Cal benefits. Nor do we address plaintiffs’ contention that the arbitration agreement at issue in this case applied only to medical malpractice claims and not CLRA claims. These issues may be raised as appropriate in subsequent proceedings.

3 Of course, parties may conceivably enter into an arbitration agreement that provides a different standard of enforceability than that found in section 2 of the FAA. There is no indication in the present case that the parties have done so.

4 Plaintiffs also claim the FAA preemption issue was raised for the first time in the petition for review and not in the courts below, and is therefore not properly before this court. But as Cigna points out, the issue was not raised by the trial court’s ruling, which merely held that the agreement between Broughton and Cigna did not encompass the arbitration of CLRA claims. The Court of Appeal, on the other hand, held that the CLRA itself precludes arbitration, which directly raises the issue of FAA preemption, although neither the Court of Appeal nor the parties addressed that issue. This court is empowered to decide issues necessary for the proper resolution of the case before it, whether or not raised in the courts below. (See Cal. Rules of Court, rule 29.2(a); Cedars-Sinai Medical Center v. Superior Court (1998) 18 Cal.4th 1, 6 [74 Cal.Rptr.2d 248, 954 P.2d 511].)

5 It is true, of course, that many injunctions will have effects beyond the parties themselves. For example, an injunction in the copyright field will prevent certain parties from selling products to third parties. (See, e.g., Saturday Evening Post Co. v. Rumbleseat Press, Inc. (7th Cir. 1987) 816 F.2d 1191, 1198-1199 [preventing copyright infringement]; Kamakazi Music Corp. v. Robbins Music Corp. (2d Cir. 1982) 684 F.2d 228, 229, 231) [same]; see also General Dy. Corp. v. Local 5, Ind. U. of Marine, etc. (1st Cir. 1972) 469 F.2d 848, 850 [approving arbitrator’s award enjoining employees from violating no-strike clause]; Sprinzen v. Nomberg (1979) 46 N.Y.2d 623, 631 [415 N.Y.S.2d 974, 389 N.E.2d 456] [approving arbitrator’s award enforcing restrictive employment covenant].) In Advanced Micro Devices, Inc. v. Intel Corp. (1994) 9 Cal.4th 362, 381 [36 Cal.Rptr.2d 581, 885 P.2d 994], we upheld an arbitrator’s grant and extension of certain licensing agreements that doubtless would have some effect on third parties. But in all the cases cited above, the effects of the arbitrator’s decision on third parties were incidental to the primary purpose of resolving a conflict between the parties and rectifying individual wrongs. We do not decide if these types of injunctions are arbitrable.

In the present case, however, plaintiffs asked for an injunction against Cigna’s “deceptive methods, acts, and practices,” an injunction that will obviously not benefit them directly, since they have already been injured, allegedly, by such practices and are aware of them. Moreover, even if a CLRA plaintiff stands to benefit from an injunction against a deceptive business practice, it appears likely that the benefit would be incidental to the general public benefit of enjoining such a practice. Unlike an antitrust treble damages award, for example, where the plaintiff is the primary beneficiary of such an award and the public only indirectly benefited by its deterrent value, in the case of a CLRA injunction the public is generally benefited directly by the elimination of deceptive practices, and the plaintiff benefited, if at all, only by virtue of being a member of the public. Thus, we disagree with the concurring and dissenting opinion that the public benefit of a CLRA injunction is “only incidental (or, at best, complementary) to providing the CLRA plaintiff with a complete remedy.” (Cone, and dis. opn., post, at p. 1100.) We do not decide the hypothetical case of the CLRA plaintiff whose injunctive relief claim stands to benefit him or her uniquely without public benefit.

6 As the concurring and dissenting opinion points out, a CLRA claim, like the antitrust claim at issue in Mitsubishi Motors, “remains at all times under the control of the individual litigant” and “no citizen is under an obligation to bring” such an action, nor does the CLRA plaintiff require “executive or judicial approval” before settling a CLRA claim. (Mitsubishi Motors, supra, 473 U.S. at p. 636 [105 S.Ct. at p. 3359].) But once the consumer brings an injunctive relief action under the CLRA, the fashioning and continuing supervision of such relief by a private arbitrator conflicts with the public protective purpose inherent in the Act for the reasons stated above.

7 The concurring and dissenting opinion argues that Code of Civil Procedure section 1281.2 mandates the enforcement of arbitration agreements subject only to the statutory exceptions listed therein. We disagree. Rather, we agree with the United States Supreme Court, as cited above, that a legislative body may express its intention to make a statutory right inarbitrable not only explicitly, but also implicitly in those rare circumstances in which the fulfillment of the statutory purpose inherently conflicts with arbitration.

8 Our holding does not imply that the government itself may not be a party to an arbitration agreement. Public sector arbitration is common, for example, in the field of labor relations. (See, e.g., Fire Fighters Union v. City of Vallejo (1974) 12 Cal.3d 608 [116 Cal.Rptr. 507, 526 P.2d 971].) But the Legislature did not intend, nor do we believe the FAA compels, a private attorney general who seeks injunctive relief on behalf of the public to submit the question to a private arbitrator.

9 Because we conclude that the FAA does not compel private arbitration of public injunctions, we need not consider plaintiffs’ related argument that the Tenth Amendment precludes interpreting the FAA to prohibit legislatures from delegating enforcement of public injunctions exclusively to the courts.

10 Plaintiffs cite Alexander v. Gardner-Denver Co. (1974) 415 U.S. 36 [94 S.Ct. 1011, 39 L.Ed.2d 147], and its progeny—Barrentine v. Arkansas-Best Freight System (1981) 450 U.S. 728 [101 S.Ct. 1437, 67 L.Ed.2d 641], and McDonald v. West Branch (1984) 466 U.S. 284 [104 S.Ct. 1799, 80 L.Ed.2d 302]—for the proposition that the United States Supreme Court has not uniformly favored resolution of statutory claims by arbitration. “In Gardner-Denver, the issue was whether a discharged employee whose grievance had been arbitrated pursuant to an arbitration clause in a collective-bargaining agreement was precluded from subsequently bringing a Title VII action based upon the conduct that was the subject of the grievance. In holding that the employee was not foreclosed from bringing the Title VII claim, we stressed that an employee’s contractual rights under a collective-bargaining agreement are distinct from the employee’s statutory Title VII rights[.]” (Gilmer, supra, 500 U.S. at pp. 33-34 [111 S.Ct. at p. 1656].) Barrentine and McDonald involved similar statutory claims submitted to arbitration pursuant to a collective bargaining agreement.

The Gilmer court articulated the reasons why these three cases differ from the line of cases quoted above affirming the arbitrability of statutory claims. “First, [these three] cases did not involve the issue of the enforceability of an agreement to arbitrate statutory claims. Rather, they involved the quite different issue whether arbitration of contract-based claims precluded subsequent judicial resolution of statutory claims. Since the employees there had not agreed to arbitrate their statutory claims, and the labor arbitrators were not authorized to resolve such claims, the arbitration in those cases understandably was held not to preclude subsequent statutory actions. Second, because the arbitration in those cases occurred in the context of a collective-bargaining agreement, the claimants there were represented by their unions in the arbitration proceedings. An important concern therefore was the tension between collective representation and individual statutory rights .... Finally, those cases were not decided under the FAA, which, as discussed above, reflects a ‘liberal federal policy favoring arbitration agreements.’ ” (Gilmer, supra, 500 U.S. at p. 35 [111 S.Ct. at p. 1657].) In the present case, none of the above considerations are in play, and these cases are therefore inapposite.