CJAC Calls on Governor Newsom to Veto Anti-Arbitration Bill

Media Contact:
Nick Mirman
nick@cmpublicaffairs.com

SACRAMENTO, Calif. (September 24, 2025) — The Civil Justice Association of California (CJAC) today called on Governor Gavin Newsom to veto SB 82 (Umberg), a bill that would severely limit the use of arbitration in California.

CJAC warned that SB 82 is almost certainly preempted by the Federal Arbitration Act (FAA), meaning it will invite costly and unnecessary litigation against the state.

“California has tried this before,” said Kyla Christoffersen Powell, President and CEO of CJAC. “Repeatedly, the state has attempted to impose restrictions on arbitration, and the courts – frequently the U.S. Supreme Court – have struck those laws down as preempted by federal law. SB 82 is no different.”

Preemption and Costly Consequences
By limiting the ability of consumers and businesses to voluntarily resolve disputes through arbitration, SB 82 conflicts with federal law that favors arbitration as a more efficient, cost-effective alternative to the courts. If signed, the measure will trigger lawsuits over its enforceability, meaning taxpayers will foot the bill for years of litigation the state is almost certain to lose.

California’s last attempt to limit arbitration, AB 51 (2019), resulted in years of litigation, a Ninth Circuit decision striking it down, and over $800,000 in attorneys’ fees paid by the state to the plaintiffs – in addition to the cost of defending an indefensible law. SB 82 sets up the same outcome, with even broader exposure.

Burdening Consumers, Small Businesses, and Courts
CJAC emphasized that SB 82 would force businesses and consumers into multiple, duplicative contracts for everyday transactions, as well as clog California’s already overwhelmed court system with thousands of new cases.

“Arbitration is faster, less costly, and often provides better outcomes for consumers and employees. But SB 82 isn’t just bad policy, it’s unconstitutional,” said Christoffersen Powell. “The Governor should veto SB 82 and spare Californians from years of wasted litigation.”

To read the coalition’s letter to Governor Newsom, click here.