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Friday, May 3, 2013

Natalini v. Import Motors: Supreme Court Grants Review of Arbitration Unconscionability Decision

As anticipated, the California Supreme Court on May 1 granted review of Natalini v. Import Motors (1/7/13, pub. 2/5/13) (discussed here), in which the Court of Appeal held:
  • Concepcion does not invalidate unconscionability analysis. 
  • The arbitration agreement was procedurally unconscionable because: (a) the seller presented it on a take it or leave it basis, and the buyer could not negotiate it; and (b) it was located on the back of the purchase contract and was not pointed out to the buyer. 
  • The arbitration agreement was substantively unconscionable because it was designed to benefit the seller in a number of ways: (a) it permitted an appeal only in case of an award of $0 or greater than $100,000; (b) it permitted an appeal if the award included injunctive relief; and (c) it allowed self-help remedies, including repossession. 
The Court has deferred briefing pending its decision in Sanchez v. Valencia Holding Co. (Case No. S199119), which raises the following issue:

Does the Federal Arbitration Act, as interpreted in AT&T Mobility LLC v. Concepcion (2011) 563 U. S. __, 131 S.Ct. 1740, preempt state law rules invalidating mandatory arbitration provisions in a consumer contract as procedurally and substantively unconscionable?  

Sanchez is fully briefed.  The Court's web page for it is here.  

Natalini is case no. S209324. The Court's web page for it is

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