Yesterday, the Supreme Court handed down its long-awaited opinion in Sonic-Calabasas A, Inc. v. Moreno, ___ Cal.4th ___ (Oct. 17, 2013) (Sonic II). Justice Liu drafted the 70-page majority opinion; Justice Chin, joined by Justice Baxter, dissented.
Although the case is not a class action, the opinion is of keen interest because this is the California Supreme Court's first consideration of AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740 (2011).
Review was first granted in this case in 2009. In 2011, the Supreme Court issued an opinion (Sonic I), but the U.S. Supreme Court granted the defendant's cert. petition, vacated the 2011 opinion, and remanded for reconsideration in light of Concepcion. After further briefing and re-argument, this is the opinion we have been waiting for.
In essence, Sonic II holds that the Federal Arbitration Act, as construed in Concepcion, does not preempt generally applicable state-law rules of contractual unconscionability. That is also what the Ninth Circuit held in Kilgore and Coneff, although neither case is cited in Sonic II.
Sonic II also contains a multi-page discussion of American Express Co. v. Italian Colors Restaurant, 133 S.Ct. 2304 (2013). Slip op. at 42-50.
Although the impact is somewhat softened by the similar holdings of Kilgore and Coneff, as well as earlier opinions of the Court of Appeal on the same issue (most of which have been taken up for review), this is a landmark decision.
Major contratulations to Miles Locker and Rachel Folberg for their monumental win!