Overview

• The court held that California’s 30-day arbitration fee-payment rule is not preempted by the Federal Arbitration Act when harmonized with state contract and equitable principles.
• The court rejected a rigid forfeiture approach and limited loss of arbitration rights to willful, fraudulent or grossly negligent nonpayment.
• The decision directs lower courts to apply Civil Code §§3275, 1511 and Code of Civil Procedure §473(b) to excuse delays caused by good-faith mistakes, inadvertence or excusable neglect.
• Hohenshelt was remanded for factfinding on whether Golden State Foods’ late payment qualifies for equitable relief under the revised standard.
• Outstanding issues include the rule’s reach in FAA-only governed arbitrations and its tension with the AAA’s automatic-waiver provision, which may prompt further litigation.