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Keeton v. Tesla (CA1/1 A166690 6/26/24) Arbitration Fees

By June 26, 2024June 30th, 2024Uncategorized

Plaintiff Dominique Keeton sued her employer, Tesla, Inc. (Tesla), for discrimination, harassment, and retaliation.  The parties agreed to submit the dispute to arbitration as provided in their arbitration agreement.  After Tesla failed to pay its arbitration fees within the 30-day window established by Code of Civil Procedure section 1281.98, subdivision (a)(1), Keeton moved to vacate the order submitting the dispute to arbitration.  The trial court granted the motion, finding that under section 1281.98, Tesla materially breached the parties’ arbitration agreement, and thus Keeton was entitled to proceed with her claims in court.

On appeal, Tesla argues the trial court erred in granting Keeton’s motion to vacate because (1) the arbitration agreement delegated issues of arbitrability to the arbitrator; (2) the Federal Arbitration Act (FAA) (9 U.S.C. § 1 et seq.) preempts section 1281.98; and (3) section 1281.98 constitutes an unconstitutional impairment of the arbitration agreement.  We disagree and affirm.