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Arbitration Unconscionable Contracts Federal Arbitration Act

Arbitration is a widely-used method for settling disputes between parties. During arbitration, parties submit their dispute to an impartial third person or party, usually chosen by the parties. Typically, parties... more +
Arbitration is a widely-used method for settling disputes between parties. During arbitration, parties submit their dispute to an impartial third person or party, usually chosen by the parties. Typically, parties to arbitration agree in advance to be bound by the arbitrator's decision. Arbitration is an alternative to litigation, but it shares many of the familiar features of litigation. Namely, parties to arbitration hold hearings before neutral decision-makers, present evidence and argue the merits of their position. Parties often choose arbitration due to its perceived advantages over litigation. Those perceived advantages include greater efficiency and flexibility, and lower costs. less -
Kilpatrick

Ninth Circuit decides two pro-arbitration cases

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The Ninth Circuit concluded that arbitration agreements were enforceable in two opinions that addressed three significant arbitration issues: (1) the standards applicable to the mutual assent analysis in online transactions;...more

Ogletree, Deakins, Nash, Smoak & Stewart,...

California Appellate Decision Raises New Considerations for Arbitration Agreements

A California appellate court recently denied a motion to compel arbitration, finding the agreement unconscionable in part because it (1) applied to all claims rather than just those arising from employment, (2) was unlimited...more

Ogletree, Deakins, Nash, Smoak & Stewart,...

California Supreme Court Says Severing Unconscionable Terms From Arbitration Agreements Is a Question of Fairness

On July 15, 2024, the Supreme Court of California issued a decision that could provide courts in the state with significant discretion to refuse to enforce employment arbitration agreements even if only one term is determined...more

Troutman Pepper

Ninth Circuit Reverses District Court, Sending Opportunity Financial Lawsuit to Arbitration

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The U.S. Court of Appeals for the Ninth Circuit recently reversed a district court’s ruling, which had denied a motion to compel arbitration of Opportunity Financial (OppFi) on the basis that the arbitration clause was...more

Skadden, Arps, Slate, Meagher & Flom LLP

Court of Chancery Dismisses Consent and Unconscionability Claims Challenging Contract Between Parent and Wholly Owned Subsidiary

On March 30, 2020, in The Chemours Company v. DowDuPont Inc., et al., C.A. No. 2019-0351-SG (Del. Ch. Mar. 30, 2020), the Delaware Court of Chancery issued an important decision reaffirming bedrock principles of Delaware...more

Payne & Fears

California Appellate Court Issues Guidance on Enforcing Arbitration Agreements

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While much of the world came to a halt in response to the coronavirus pandemic, the California Courts of Appeal were busy issuing important decisions on the enforceability of arbitration clauses. As the economy starts to...more

Ballard Spahr LLP

Small business borrowers bring lawsuit alleging lender engaged in “rent-a-charter” scheme to make usurious loans

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A group of small businesses and their individual owners have filed a putative class action lawsuit in a New York federal district court against online lender Kabbage, Inc. that alleges Kabbage engaged in a “rent-a-charter”...more

Littler

Easily “Shocked”? At Least for Wage Claims, California Supreme Court Lowers Standard for Unconscionability in Arbitration...

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In OTO, L.L.C. v. Kho, the California Supreme Court refused to enforce an employee’s arbitration agreement on the basis that it was unconscionable.  Unconscionability has long been a common-law defense to contract...more

Proskauer - California Employment Law

California Employment Law Notes - September 2019

California Supreme Court Invalidates Agreement To Arbitrate Wage Disputes - OTO, LLC v. Kho, 2019 WL 4065524 (Cal. S. Ct. 2019) - In the most recent chapter of the ongoing saga regarding the enforceability of...more

Seyfarth Shaw LLP

California Invalidates Wage Arbitration Agreement, Inviting U.S. Supreme Court Review

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Seyfarth Synopsis: The California Supreme Court invalidated an employment arbitration agreement on August 29, 2019. At issue in OTO, LLC v. Kho was an agreement to arbitrate employment claims, including wage claims. Under the...more

Payne & Fears

Ninth Circuit Reverses Grant of Class Certification and Denial of Motions to Compel Arbitration in Several Uber Class Actions

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In a major victory for ride-share company Uber Technologies, Inc. ("Uber"), the United States Court of Appeals for the Ninth Circuit issued its much anticipated opinion in O'Connor v. Uber Technologies, Inc., Case No....more

Burr & Forman

Court Rejects Unconscionability Challenge to Arbitration Agreement That Was “Voluntary” and Not Obligatory

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On September 4, 2018, the Mississippi Court of Appeals upheld an arbitration agreement between a nursing home and its resident. See Massey v. Oasis Health & Rehab of Yazoo City, LLC, No. 2017-CA-00086-COA, 2018 WL 4204207...more

Cohen & Gresser LLP

We Have an Arbitration Agreement. Now What?

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The U.S. Supreme Court, in recent years, has provided companies with a powerful tool to avoid class action lawsuits: arbitration. In a series of decisions, the Supreme Court has held that class action waivers in otherwise...more

Foley & Lardner LLP

Shouldn't You Be Using Arbitration Agreements to Reduce the Costs of Litigation and the Risk of Class Action Claims?

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Businesses across the country regularly bemoan the time and expense of litigation. Even when businesses are successful in defending non-meritorious consumer claims alleging unfair or deceptive practices, false advertising,...more

Carlton Fields

New Jersey Court Compels Arbitration, Declines To Appoint Substitute Arbitrator Despite “Exorbitant” Administrative Fee

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Terra Finance LLC brought an action to compel arbitration. Defendant Acrow Corporation moved to dismiss the action under Fed. R. Civ. P. 12(b)(6), arguing that the arbitration clause was unconscionable, and therefore...more

Foley & Lardner LLP

The Supreme Court Preview, Part II: Tuning Up Arbitration Clauses

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This is the second post in our series “The Supreme Court Preview,” - California state and federal courts have a rocky history with the U.S. Supreme Court, as the highest court in the land has repeatedly reversed the...more

Parker Poe Adams & Bernstein LLP

Supreme Court Agrees to Review California Rule Invalidating Contractor Arbitration Agreements

On October 1, the U.S. Supreme Court agreed to hear the appeal of a company whose mandatory arbitration agreements with its contractors were deemed invalid by California state courts. Once again, the Court will determine...more

Carlton Fields

Tennessee Supreme Court Holds That State Unconscionability Law Does Not Implicate Concepcion And Is Not Preempted By FAA

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The Supreme Court of Tennessee reversed the lower courts’ rulings that a non-mutual arbitration provision in an installment contract on the sale of a manufactured home was unconscionable and unenforceable. In doing so,...more

Burr & Forman

TN COA: Arbitrators Decide Scope and Unconscionability

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The Tennessee Court of Appeals at Jackson recently enforced a NY choice-of-law provision against an arbitration challenge, holding that courts determine contract-formation issues, while arbitrators decide the scope and...more

Carlton Fields

California Supreme Court Upholds Consumer Contract Arbitration Provision Under California’s Unconscionability Framework

Carlton Fields on

In a dispute over the purchase of a car, the purchaser filed a class action in California against the car dealer, and the dealer moved to compel arbitration. The dealer invoked the arbitration agreement contained in the...more

Ballard Spahr LLP

California Supreme Court Upholds Arbitration Clause, but Unconscionability Remains a Defense to Arbitration

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The California Supreme Court issued its long-awaited decision in Sanchez v. Valencia Holding Company, LLC, on August 3, 2015, reversing a finding by the Court of Appeal that an arbitration provision was unconscionable...more

Sheppard Mullin Richter & Hampton LLP

The California Supreme Court Holds Consumer Class Action Waivers In Arbitration Provisions Are Enforceable Under Federal Law

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...more

Foley & Lardner LLP

Clean-Up in Aisle 9: Ninth Circuit Finds Ralphs Grocery Company’s Arbitration Policy Unconscionable Under State Law Not Preempted...

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As we have reported on several occasions, a string of United States Supreme Court cases over the past few years has strengthened the use and applicability of arbitration provisions in contracts. For example, in AT&T Mobility...more

Nossaman LLP

Did You Know…The Continuing Saga Of Arbitration Agreements & Unconscionability

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In light of the United States Supreme Court decision in AT&T Mobility LLC v. Concepcion, the California Supreme Court recently reversed its own prior decision where it had held that an arbitration agreement that requires an...more

Littler

Through the Lens of Concepcion: California Supreme Court Revisits the Validity of Agreements Requiring Employee Waiver of Wage...

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Almost one year after the U.S. Supreme Court summarily vacated the original 2011 Sonic-Calabasas opinion (Sonic I), the California Supreme Court issued its opinion on remand in Sonic-Calabasas A, Inc. v. Moreno (Sonic II). ...more

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