The California Supreme Court has issued its long-awaited opinion resolving the split in authority regarding whether Code of Civil Procedure sections 1281.97 and 1281.98 are preempted by the Federal Arbitration Act. The Court found that the FAA does not preempt section 1281.98 (although the Court’s opinion focuses on 1281.98 preemption, the same analysis is applicable to 1281.97). However, the Court rejected the statute’s “rigid construction” and lack of relief for late payments that are not “willful, fraudulent, or grossly negligent.”
CA Supreme Court Says Not So Fast on Draconian Arbitration Invoice Payment Rules
