On August 3, 2015, the California Supreme Court issued its long-awaited arbitration decision in Sanchez v. Valencia Holding Co., LLC, No. B228027. The Court held that the arbitration provision found in a standard form auto finance and sales contract widely used by auto dealerships and lenders throughout California is not unconscionable. Not surprisingly, the Court acknowledged the recent U.S. Supreme Court authority holding that the Federal Arbitration Act (“FAA”) preempts conflicting state law, and affirmed that California law must now recognize the enforceability of class action waivers contained in arbitration provisions under the FAA. Nevertheless, arbitration provisions can be rendered unenforceable, depending on a fact intensive analysis of unconscionability. The Court refused to apply a uniform, bright-line standard. The ruling is unlikely to stem the tide of litigation over the enforceability of arbitration provisions in high stakes class action litigation.
Continue Reading The California Supreme Court Holds Consumer Class Action Waivers In Arbitration Provisions Are Enforceable Under Federal Law
