In putative privacy class action Hodges v. Comcast Cable Communications, LLC, involving Comcast's privacy and data-collection practices, Comcast moved to compel arbitration based on its subscriber agreement. The district court denied the motion based on California's McGill rule, which may invalidate arbitration agreements that purport to waive the right to seek public injunctive relief in any forum.
The Ninth Circuit recently reversed, limiting plaintiffs' ability to invoke the McGill rule by narrowly defining the types of claims that seek public injunctive relief. The majority defined public injunctive relief as limited to "prospective injunctive relief that aims to restrain future violations of law for the benefit of the general public as a whole, rather than a discrete subset of similarly situated persons, and that does so without requiring consideration of the individual claims of non-parties." Since the Hodges plaintiff sought injunctive relief that would benefit only cable subscribers, the majority held that he did not seek public injunctive relief, so the case should have been sent to arbitration.
Notably, the majority in Hodges recognized that its definition of public injunctive relief is narrower than that adopted by California state appellate courts in Mejia v. DACM Inc., 54 Cal. App. 5th 691 (2020), and Maldonado v. Fast Auto Loans, Inc., 60 Cal. App. 5th 710 (2021). In light of Hodges, companies seeking to enforce arbitration agreements should consider strategies to litigate McGill issues in federal court.
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