In a case closely watched by the class action bar, the California Supreme Court has punted on deciding whether to jettison a long-standing rule that bars consumer suits seeking broad injunctive relief from being pushed into arbitration.

Thursday's unanimous ruling, in McGill v. Citibank, sets the stage for a potential clash before the U.S. Supreme Court, which has repeatedly sided against California in key arbitration cases. One such case was the 2011 Supreme Court decision in AT&T v. Concepcion, which found that the Federal Arbitration Act pre-empted California's ban on class action waivers in arbitration clauses.

McGill addressed whether Concepcion and more recent U.S. Supreme Court decisions, such as a 2013 ruling in American Express v. Italian Colors, now require the California court to overrule its previous decisions allowing consumers to avoid arbitration when they bring injunctive relief claims on behalf of the public. Groups such as the U.S. Chamber of Commerce, Pacific Legal Foundation and the International Association of Defense Counsel urged the court to abandon what they view as a loophole in federal arbitration policy. Public Citizen and the AARP backed the plaintiff.