Narrative Opinion Summary
The case involves Provident Bank's appeal against the district court's decision denying its motion to compel arbitration. The core legal issue revolves around the enforceability of a class-action waiver in a consumer contract of adhesion under California law. The court upheld the district court's ruling, affirming that the waiver was unconscionable based on the precedent set by Discover Bank v. Superior Court. California law, which deems such waivers unconscionable, was not overridden by the contract's Ohio choice-of-law provision due to a conflict with California public policy. Additionally, the Federal Arbitration Act did not preempt state law in this context. The appellate court affirmed the district court's judgment and remanded the case for further proceedings. The decision is not published and is subject to citation restrictions under Ninth Circuit Rule 36-3.
Legal Issues Addressed
Conflict of Laws: Choice-of-Law Provisionssubscribe to see similar legal issues
Application: The Ohio choice-of-law provision did not alter the outcome because it conflicted with California public policy, which does not enforce unconscionable class-action waivers.
Reasoning: The Ohio choice-of-law provision in the contract does not alter this outcome, as any Ohio law that might enforce the waiver would conflict with California public policy.
Federal Preemption and the Federal Arbitration Actsubscribe to see similar legal issues
Application: The provisions of the Federal Arbitration Act do not preempt California law on unconscionable class-action waivers, allowing the state law to prevail.
Reasoning: Furthermore, provisions of the Federal Arbitration Act do not preempt California law concerning unconscionable class-action waivers.
Unconscionability of Class-Action Waiverssubscribe to see similar legal issues
Application: The court applied the precedent from Discover Bank v. Superior Court to determine that the class-action waiver in the consumer contract of adhesion was unconscionable and thus invalid under California law.
Reasoning: The ruling is supported by the precedent established in Discover Bank v. Superior Court, which determined that class-action waivers in consumer contracts of adhesion that exempt a party from accountability for wrongdoing are unconscionable.