Victory for Justice in Fensterstock

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3 Responses

  1. Nate Oman says:

    I haven’t read this case, but I am suspicious about the use of unconscionability in these cases. Suppose that I really do give up my right to pursue a small claim. The very fact that the claim is so small makes it difficult, I think, to claim with a straight face that the contract is unconscionable. For my money, these California unconscionability represent two issues. The first is an attempt to revive the old public-policy doctrine against binding arbitration notwithstanding the FAA by dressing the old public-policy argument up as an unconscionability claim. Second, I think that even if they can’t revive the old public-policy doctrine they still want to police particular arbitration practices on public policy grounds. It seems to me that that a contract where I give up a small claim is not unconscionable simply because in so doing, we reduce monitoring of the firms misbehavior by private parties. Rather, it seems to me that the cases are saying that regardless of whether it is unconscionable, we want to make the disclaimer of such small claims in valid as a way of harnessing private litigation to serve some public policy goal. Fair enough, but if this is so the California courts should just say so and quit mucking around with nonsense about procedural unconscionability, the size of the font in the contract, and the like. In particular, I think that these unconscionability cases in the context of arbitration potentially create an undesireablely broad unconscionability doctrine were the same principles to be applied to other cases.

  2. peter says:

    I am not quite sure if I follow the critique. The public policy goal that the California courts seem to want to allow private litigation to advance is the goal of not effectively insulating parties from liability altogether, by allowing those parties to engage in deliberately dishonest, penny-ante cheating of their customers, by insisting up front that if they ever rip you off for 25 cents a month, after you signed a boilerplate contract that afforded you no opportunity to negotiate, you have to arbitrate on a 1-on-1 basis, which it is pretty certain no one will do.

  3. Edward K. Lenci (ACS's counsel) says:

    On June 13, 2011, the US Supreme Court vacated the Second Circuit’s decision and remanded the case for further consideration in light of AT&T Mobility v. Concepcion.