Discover Bank v. Superior Court
|Discover Bank v. Superior Court|
|Supreme Court of California|
|Decided June 27, 2005
|An arbitration agreement with a class-action waiver was unenforceable on the grounds of unconscionability|
|Majority by: Moreno
Joined by: George, Kennard, Werdegar
Concurrence/dissent by: Baxter
Joined by: Chin, Brown
|Federal Arbitration Act, California Civil Code §1668|
Discover Bank v. Superior Court (30 Cal.Rptr.3d 76) is a 2005 case where the California Supreme Court ruled that an arbitration clause was unenforceable because a class-action waiver contained within it would exculpate Discover Bank from liability for wrongdoing involving small sums of damages. Carlos R. Moreno, in the majority opinion, stated the Discover Bank test to determine whether a class-action waiver is unenforceable. In the Discover Bank test, a class-action waiver will be unenforceable under California law when it appears in a "consumer contract of adhesion," when the disputes "predictably involve small amounts of damages," and where the plaintiff alleges that "the party with the superior bargaining power has carried out a scheme to deliberately cheat large numbers of consumers out of individually small sums of money."
The United States Supreme Court overruled Discover Bank in a 5–4 decision in the 2011 case AT&T Mobility v. Concepcion.
- 30 Cal.Rptr.3d at 87