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Flores v. Superior Court of Los Angeles County12/17/2003
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.
OPINION AND ORDER GRANTING PEREMPTORY WRIT OF MANDATE
INTRODUCTION
We hold that the Federal Arbitration Act does not preempt Business and Professions Code statutes governing patent marketing contracts. Accordingly, upon remand, if respondent court finds that petitioner Eduardo Flores qualifies as a "customer" under the subject Business and Professions Code sections, Mr. Flores may not be compelled to arbitrate his claims against New Products of America and its principals.
FACTS
Eduardo Flores, an inventor, contracted with New Products of America, a Nevada corporation that has its principal place of business in Georgia, to patent and market his invention, the Rangel Cover. In 2000, Mr. Flores signed two separate contracts, one entitled, "New Product Report," and the other denominated, "Client Assistant Agreement."
While both contain arbitration clauses, neither agreement sets forth statutorily-mandated disclosures in at least 10-point boldface type, nor explains statutorily-mandated cancellation procedures and timing.
Mr. Flores sued New Products and its principals (Ron Dern and Mel Kent, residents of Georgia, and Julian Gumpel, resident of Nevada), alleging violation of various Business and Professions Code statutes governing patent marketing contracts. Claiming that the contracts do not comply with requirements set forth in the Business and Professions Code, Mr. Flores seeks statutory damages and rescission of the contracts.
New Products moved to compel arbitration pursuant to the arbitration clauses contained in the two contracts. Mr. Flores opposed the motion; New Products replied. In response, Mr. Flores provided his declaration, in Spanish, stating that, during the year he signed the contract, he was a worker earning less than $50,000 per year with a net worth under $100,000; his English is sufficient only for ordering in restaurants; he did not graduate from any schools; and the contracts he signed with New Products were in English and not presented to him in translation.
New Products countered that Mr. Flores' declaration, without more, was inadequate to prove the amount he earned or his financial net worth.
Respondent court granted the motion. The minute order provides that the basis for the granting of the motion is set forth in the notes of the official court reporter; however, because Mr. Flores does not provide a copy of the reporter's transcript, we accept his representation that respondent court granted the motion on the basis that the Federal Arbitration Act (FAA) preempts the Business and Professions Code statutes governing patent marketing contracts.
DISCUSSION
Business and Professions Code protections
California protects its inventors in a series of statutes that provide both civil remedies and criminal penalties against patent-marketing companies that take advantage of inventors at the lower end of the economic scale.
Business and Professions Code section 22370 explains that the Legislature enacted this set of statutes to protect poorer inventors:
"(a) The Legislature finds that there are in the State of California members of the general public who have ideas or inventions that they believe have substantial commercial value but which members o
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