Thursday, December 01, 2005

Then again, California law is still pretty expansive

Aral v. Earthlink, Inc., --- Cal.Rptr.3d ----, 2005 WL 3164258 (Cal.App. 2 Dist.), affirmed an order denying Earthlink’s petition to compel arbitration of a putative statewide class action claim for violation of state ufair competition law. The UCL claim was based on Earthlink’s practice of charging for DSL service from the time service was ordered, even though the necessary equipment to start service didn’t arrive for some time (in the named plaintiff’s case, five weeks). The court held that, based on general principles of California law, provisions in adhesion contacts that preclude class actions are unconscionable where the case involves allegations that a large number of consumers have been cheated out of a small sum of money. Moreover, EarthLink sought an order specifying that arbitration of a minor monetary claim by a California resident take place in Georgia, and the court separately held that the forum selection clause discouraged legitimate claims by imposing unreasonable geographical barriers and was unenforceable.

Read about a just-argued Supreme Court case relevant to California courts' interpretation of the FAA here.

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