Unconscionability Findings In Arbitration Agreements Still Possible In Other Than Class Action Waivers.

When the named plaintiff in a class action against a holding company purchased a car, he signed an arbitration agreement which contained a class action waiver. The trial court denied the defendant’s motion to compel arbitration, finding the class waiver unenforceable on the ground the California Legal Remedies Act [CLRA; Civil Code sections 1750-1784] declares the right to a class action to be nonwaivable. After the trial court’s decision, but prior to the Court of Appeal’s opinion, the U.S. Supreme Court issued AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333 [131 S.Ct. 1740, 179 L.Ed.2d 742], which held the Federal Arbitration Act [FAA] preempts California’s unconscionability rule prohibiting class waivers in consumer arbitration agreements. When the Court of Appeal issued its opinion in the instant case, it did not address whether the class waiver was enforceable and instead held other provisions within the arbitration agreement rendered the agreement as a whole to be unconscionably one-sided. The holding company took the matter to the California Supreme Court which held Concepcion requires enforcement of the class waiver provision but does not limit unconscionability rules applicable to other provisions of arbitration agreement. However, the California Supreme Court found that, applying those rules in the instant case, the Court of Appeal erred as a matter of state law in finding the agreement unconscionable. (Sanchez v. Valencia Holding Co., LLC (Cal. Sup. Ct.; August 3, 2015) 61 Cal.4th 899 [190 Cal.Rptr.3d 812, 353 P.3d 741].)