Where a party to an arbitration agreement is financially incapable of sharing the costs of arbitration, the Court has discretion to retain jurisdiction over the action and deny arbitration. See Roldan v. Callahan & Blaine, 219 Cal.App.4th 87 (2013); see also Cal. Code Civ. Proc. § 1281.2. Confronted with the issue of whether plaintiffs could be excused from the obligation to pay fees associated with arbitration, the Court of Appeal concluded they could. Roldan, 219 Cal.App.4th at 95. “If, as plaintiffs contend, they lack the means to share the cost of the arbitration, to rule otherwise might effectively deprive them of access to any forum for resolution of their claims against [defendants]. We will not do that. Of course, as the trial court recognized, we cannot order the arbitration forum to waive its fees.” Roldan, 219 Cal.App.4th at 96.
Significantly, Roldan appears to have distanced its ruling from unconscionability analysis, as the Court stated:
However, we need not go as far as either Gutierrez or Parada did in resolving this appeal. We need not, and do not, reach the issue of whether the arbitration agreements are actually unenforceable for any of the reasons set forth in plaintiffs’ oppositions to [Defendant’s] petitions to compel arbitration. Instead, we assume for purposes of this appeal that the court’s earlier orders compelling arbitration were correct. The only issue before us is whether plaintiffs, each of which was subsequently granted permission to proceed in forma pauperis in the trial court, could likewise be excused from the obligation to pay fees associated with arbitration. We conclude they could.
(Roldan, supra, 219 Cal.App.4th at 95.) Thus, Roldan assumed the contract was enforceable (i.e. conscionable), but nonetheless found a basis to prevent enforcement.
The Court noted arbitration fees could effectively deprive the Plaintiffs of access to any forum for resolution of their claims. (Id. at 96.) To avoid this result, the Court found that a waiver of the fees was necessary, but explained: “[W]e cannot order the arbitration forum to waive its fees, as a court would do in the case of an indigent litigant. Nor do we have authority to order [Defendant] to pay plaintiff’s share of those fees. What we can do, however, is give [Defendant] a choice: if the trial court determines that any of these plaintiffs is unable to share in the cost of arbitration, [Defendant] can elect to either pay that plaintiff’s share of the arbitration cost and remain in arbitration or waive its right to arbitrate that plaintiff’s claim.” (Id. at 96.)
Thus, Roldan did not rely on unconscionability, but rather, appears to have created a separate process for establishing a “fee waiver,” to support “California’s long-standing public policy of ensuring that all litigants have access to the justice system for resolution of their grievances, without regard to their financial means.” (Id. at 94.)
Roldan is not an outlier. A recent 2016 case discussed and approved Roldan and two other cases. There, the Court of Appeal instructed:
In determining the affordability of arbitration costs, a court should conduct a case-by-case analysis, with the party resisting arbitration bearing the burden of showing the likelihood of prohibitive costs. [Citation.] Our Supreme Court recently approved Gutierrez’s approach on affordability of arbitration. (Sanchez, supra, 61 Cal.4th at p. 919 [“We agree with Gutierrez’s approach.”].) It noted that an arbitration cost provision “cannot be held unconscionable absent a showing that [arbitration] fees and costs in fact would be unaffordable or would have a substantial deterrent effect in [a plaintiff's] case.
Penilla v. Westmont Corp., 3 Cal.App.5th 205, 218 (2016).
The Court of Appeal further approved Roldan in the Penilla case:
[Section 1284.2] does not override “California’s long-standing public policy of ensuring that all litigants have access to the justice system [or an alternate forum] for resolution of their grievances, without regard to their financial means.” (Roldan v. Callahan & Blaine (2013) 219 Cal.App.4th 87, 94 [161 Cal. Rptr. 3d 493].) Id. at 220. Thus, section 1284.2 cannot be interpreted to support an arbitration provision that would deny persons of limited means a forum in which to vindicate their rights. (Roldan v. Callahan, supra, 219 Cal.App.4th at pp. 95–96.)
Penilla, 3 Cal.App.5th at 220.
The Penilla court went on to suggest that even non-indigent parties may find it unaffordable to arbitrate: “[E]ven a non-indigent consumer may be substantially deterred by high arbitration costs . . . [A] person who earns $50,000 annually, supports a family, and has a claim requiring two days of hearings would likely be substantially deterred by having to advance 20 percent of his or her annual salary before arbitrating.” Penilla, 3 Cal.App.5th at 221.