STORY FROM: Reinsurance & Arbitration

Credit Card Arbitration Agreement Unenforceable, California High Court Rules

SAN FRANCISCO — Arbitration agreements that bar consumers from seeking injunctive relief pursuant to California’s Consumer Legal Remedies Act and Unfair Competition Law are contrary to public policy and cannot be enforced, California’s highest court has ruled.

In an April 6 opinion, the California Supreme Court further ruled that the Federal Arbitration Act does not require enforcement of the arbitration agreement’s provision that waives a consumer’s right to seek relief under the UCL, the CLRA, or the false advertising law.

In 2001, Sharon McGill opened a credit card account with defendant Citibank, N.A. and purchased a “credit protector” plan. Under ...

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