Initiative Legal Group v. Maxon

A California law firm and some of its members, accused in a lawsuit brought by a former client of serious ethical misconduct, moved to compel arbitration on the basis of an arbitration provision in a purported retainer agreement with the client. Under California law, which was incorporated into the contract, a retainer agreement must be signed by the attorneys and the client, and if that requirement is not satisfied, the client may elect to treat it as a nullity. Because it is undisputed that the agreement was not signed by the lawyers and that the client has repudiated the purported agreement, an intermediate California appellate court held that there is no written agreement between the parties and hence that the arbitration provision cannot be enforced. The law firm then petitioned the U.S. Supreme Court for review, arguing that the state court’s decision, and the California statute on which it is based, are preempted by the Federal Arbitration Act. Public Citizen took the lead in drafting the brief in opposition to the petition. The Supreme Court denied the petition.