If you pay your arbitration fees late, there is a penalty. That penalty, under the California Arbitration Act, is that you are deemed to have waived arbitration. In a split decision last year in *Hernandez v. Sohnen Enters.* (discussed here), the Court of Appeal held that, when the parties’ agreement specifies the Federal Arbitration Act, then the FAA preempts the CAA. The Supreme Court granted review of Hernandez, which as of February 2025 is still pending.
Following that precedent, Boub v. Prime Healthcare likewise holds that CAA is preempted. The parties agreed that the FAA applies. Prime timely mailed a check to JAMS, but JAMS said they didn’t receive it (although they cashed it). Prime sent a second check, but it was after the 30-day deadline. Eventually the trial court had to hold an evidentiary hearing on this issue, ultimately concluding there was no sufficient evidence that the check was received before the 30-day deadline. So applying the penalty under Code of Civil Procedure section 1281.97, the court deemed Prime to have waived arbitration.
Reversing, the Court of Appeal held that, because the parties agreed to the FAA, the procedural portions of the CAA—such as governing arbitration fees—did not apply.
Comment: Bookmark Hernandez in case you make a late payment in an FAA-governed arbitration in California. And even if there is no FAA provision in the agreement, you might still have an argument. See Hohenshelt v. Superior Court (2024) 99 Cal.App.5th 1319 (review granted [S284498]). But most of the cases on this are going against preemption.
