Arbitration Clause Not Substantively Unconscionable, Federal Judge Rules

SAN DIEGO - A California federal judge has compelled arbitration of a class action brought against a financial services company, ruling that the arbitration clause in a vehicle sales contract is not substantively unconscionable and is not preempted pursuant to AT&T v. Concepcion. Smith v. Americredit Financial Services, No. 09-1076 (S.D. Calif.).

On March 12, Judge Dana M. Sabraw of the U.S. District Court for the Southern District of California explained that Concepcion did not overthrow the common law contract defense of unconscionability whenever an arbitration clause is involved.

Robert Smith bought a vehicle from McCune Motors in San Diego …