The Supreme Court today issued its long-awaited opinion in Sanchez v. Valencia Holding Co.. (An earlier post announcing the forthcoming filing used imprecise language suggesting the filing was coming after the 90-day filing period. In fact, the court filed its opinion on the 90th day after argument.)
The court interprets the US Supreme Court’s interpretation of the Federal Arbitration Act in AT&T Mobility LLC v. Concepcion (2011) 563 U. S. __, 131 S.Ct. 1740, and discusses how that decision affects California’s unconscionability defense to arbitration agreements. In a 6-1 majority opinion by Justice Goodwin Liu, the court holds that Concepcion requires the enforcement of a contract provision barring class action litigation or arbitration “but does not limit the unconscionability rules applicable to other provisions of the arbitration agreement.” The court also concludes that the Court of Appeal, Second District, Division One, incorrectly found the arbitration agreement in the case to be unconscionable. Concerning one aspect of the unconscionability rule, the court approves of a 2003 opinion by the Court of Appeal, First District, Division Five.
Justice Ming Chin writes an extended concurring and dissenting opinion. He agrees with the majority’s bottom line, but he disagrees with the reasoning, including what he calls the “broad dictum” about Concepcion not limiting California’s unconscionability rules as applied to arbitration agreements.
[Disclosure: Horvitz & Levy filed an amicus curiae brief supporting the defendant.]