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McGill v. Citibank

California Supreme Court Asked to Uphold Consumers' Rights


AARP Foundation Litigation attorneys filed AARP’s friend-of-the-court brief arguing that arbitration terms that create an absolute ban on public injunctive relief are unenforceable.


California’s robust consumer protection laws empower those harmed by an unlawful business practice to serve as private attorneys general to protect the public through injunctive relief. In this case, McGill brought claims on behalf of herself and the general public under California’s consumer protection statutes against Citibank for allegedly misrepresenting its “Credit Protector” insurance program to its cardholders and charging fees to applicants who later failed to qualify for the program. In addition to requesting damages, McGill sought to enjoin Citibank from engaging in an unfair business practice. Within a unilateral amendment to its cardholder agreement, Citibank inserted a mandatory arbitration provision (the “Agreement”) that not only forced all future claims into arbitration, but also precluded any arbitrator from awarding injunctive relief to benefit the public. Citibank’s Agreement further banned all private attorney general actions or other representative suits.

The trial court partially granted Citibank’s motion to compel arbitration, but kept the public injunction remedy in court pursuant to the holding of two earlier California Supreme Court decisions, Broughton v. Cigna Healthplans of California, 21 Cal. 4th 1066 (1999) and Cruz v. PacifiCare Health Systems, Inc., 30 Cal. 4th 303 (2003) (together referred to as having established the “Broughton-Cruz rule”). Under that state law rule, arbitration provisions are unenforceable as against public policy if they require arbitration of consumer protection injunctive relief claims brought for the public’s benefit. The Broughton-Cruz rule holds that, to the extent plaintiffs seek public injunctive relief under California’s consumer protection statutes, claims must remain in court, even if all the damage claims are sent to arbitration.

The appellate court reversed, holding that the Broughton-Cruz rule had been preempted by “the sweeping directive” of the Federal Arbitration Act (“FAA”) and the California Supreme Court accepted review.  AARP’s brief argues that California law provides a non-waivable right of action by individuals who act as private attorneys general to seek injunctive relief to prevent the general public from being harmed and that preclusion of a public injunction in any forum effectively immunizes corporations from liability and improperly precludes California from protecting its residents.  

What’s At Stake

The public has a strong interest in ensuring that unfair business practices are enjoined. While this case concerns allegations of false advertising regarding a credit card insurance plan, the ruling in the case will impact the ability of consumers in the future to enjoin a multitude of unlawful business practices impacting consumers. AARP has previously filed many amicus briefs objecting to mandatory arbitration in a variety of consumer, nursing home and employment contracts.

Case Status

McGill v. Citibank was decided by the California Supreme Court issuing a positive decision agreeing with AARP.

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Find cases in which AFL has advocated in courts nationwide for the rights of older persons, and filed AARP’s amicus curiae (“friend of the court”) briefs that help courts decide precedent-setting cases. The cases within the drop-down categories below are in alphabetical order for ease of searching.

Strengthening Law and Policy through
Legal Advocacy

Our legal advocacy initiatives  - conducted by AARP Foundation Litigation (AFL) - reflect nearly 20 years of work in federal and state courts across the country. Through our efforts, we support the Foundation’s four impact areas: Tackling Senior Hunger, Paving the Way to Stable Income, assuring the adequacy and availability of Safe and Afffordable Housing and Reconnecting People to Families and Communities, and ensure that those 50 and older have a voice in the laws and policies that affect their daily lives.