Wednesday, August 26, 2015

Sonic III

Sanchez v. Valencia Holding Co., No. S199119 (Cal. Aug. 3, 2015)

This case is kind of a do-over of the second half of Sonic-Calabasas A, Inc. v. Moreno, 51 Cal. 4th 659 (2013) on the law of unconscionability as it applies to arbitration agreements. Justice Liu, joined by most of the court, thinks there are various articulable standards for substantive unconscionability, all of which more or less mean some kind of unilateralism or unfairness that goes well beyond just striking a bad deal. Justice Chin (no longer joined by Justice Baxter, who has since retired) thinks the court should settle on a “shocks the conscience” standard, which he believes to impose a higher burden than other formulations.


This time, however, the court gets to the merits. Everyone agrees that under whatever standards they might apply, the provisions at issue—various limits and exceptions to a contractual right to a de novo appeal to a three-arbitrator panel—aren’t unfair enough to render the agreement substantively unconscionable.


Reversed.

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