Case Updates
California Supreme Court upholds balanced arbitration agreement
August 03, 2015
The California Supreme Court rejected the arguments of an automobile purchaser that an arbitration agreement was unconscionable because it included a class waiver, allowed appeals for outlier awards, required the appealing party to pay for appellate costs pending an appeal, and allowed the parties to invoke self-help remedies, such as repossession.
The Court acknowledged that California’s Discover Bank rule, which holds class action waivers to be unconscionable, is preempted by the Federal Arbitration Act. Moreover, the Court concluded that the remaining provisions of the arbitration agreement were not substantively unconscionable because they were not likely to operate in a lopsided manner to benefit the automobile seller.