Williams v. 3620 W. 42nd Street, Inc.

Facts: A landlord and tenant enter into a lease agreement containing an arbitration provision requiring disputes regarding the habitability of the property to be resolved by arbitration. The landlord failed to maintain pest control in the apartment units and common areas. The tenant sustained serious injuries and illness in their apartment due to a bed bug infestation. The tenant files a lawsuit for their money losses incurred due to the infestation.

Claim: The landlord seeks to compel arbitration to resolve the dispute, claiming the tenant may not pursue recovery through court action, since the lease agreement contained an arbitration provision.

Counterclaim: The tenant claims the arbitration provision is unenforceable and void since it conflicts with public policy as a waiver of procedural rights to litigate and receive a judicial determination.

Holding: A California appeals court holds the tenant is entitled to sue the landlord in court and pursue recovery since the arbitration provision is an unenforceable waiver of the tenant’s rights to litigate, a violation of public policy. [Williams v. 3620 W. 42nd Street, Inc. (August 2nd, 2020)__CA6th__]

Editor’s note – first tuesday is writing a forthcoming article focusing on the declining use of arbitration provisions in California. This article will feature references to previous court cases, and expose how the arbitration provision is increasingly losing its enforceability in California as a matter of public policy.