August 14, 2015 Practice Points

CA Supreme Court: Arbitration Agreement Challenge Allowed under Unconscionability Rule

In light of Sanchez, individuals and companies utilizing arbitration agreements in consumer transactions in California should scrutinize the terms of their contracts to assess whether the provisions unreasonably favor the drafter

by Teresa H. Michaud

In its July 28, 2015, decision in Mullins v. Direct Digital, LLCCase No. 15-1776, the Seventh Circuit Court of Appeals rejected the Third Circuit’s strict application of class certification’s implicit ascertainability requirement, as detailed in Carrera v. Bayer Corp., 727 F. 3d 300 (3d Cir. 2013). The Mullins court concluded that the ascertainability requirement imposed by the Third Circuit is a “new” and “heightened” requirement with “absolute priority” that has the “effect of barring class actions where class treatment is often most needed: in cases involving relatively low-cost goods or services.”

In Mullins, the court affirmed an order certifying a class of purchasers of a supplement that plaintiffs alleged the defendant fraudulently represented as relieving joint discomfort. The Seventh Circuit agreed to hear the interlocutory appeal “to address whether Rule 23(b) imposes a heightened ‘ascertainability’ requirement as the Third Circuit and some district courts have held recently.” It went on to reject each of the “policy concerns motivating the heightened ascertainability requirement” that were laid out by the Third Circuit in Carrera.

Premium Content For:
  • Litigation Section
Join - Now