February 19, 2010

Suh v. Superior Court: Arbitration Agreement that Precludes Punitive Damages is Unenforceable

In this published opinion, the Second Appellate District, Division Five, invalidates an arbitration agreement which, among other things, eliminated the right to recover punitive damages:

To the extent the damage limitation clause applies to statutorily imposed remedies, such as punitive damages, it is "contrary to public policy and unlawful." (Amendariz [v. Foundation Health Pscyhcare Services, Inc. (2000) 24 Cal.4th 83,] 104.)
So California plaintiffs have a right to seek punitive damages through arbitration, but questions remain about the application of federal due process standards to any such awards.