The California Supreme Court Curtails Concepcion’s Protection of Arbitration Agreements
In AT&T Mobility v. Concepcion, the United States Supreme Court analyzed the extent to which a court could refuse to enforce an arbitration agreement because the terms are “unconscionable,” meaning that one party did not have meaningful choice in negotiating the terms and the terms are unreasonably favorable to the other party. Concepcion held that, in the context of arbitration agreements in consumer contracts, the Federal Arbitration Act (FAA) prohibits courts from denying enforcement of an arbitration agreement on the grounds of unconscionability where the application interferes with the FAA’s objectives of: (1) enforcing arbitration agreements according to their terms; and (2) facilitating informal, efficient, and streamlined proceedings tailored to the type of dispute at issue.
