In Natalani v. Import Motors, Inc., 2013 WL 64611 (Cal.App. 1 Dist. 2013), the First District Court of Appeal found in an unpublished decision that the arbitration clause in a standard-form automobile RISC to be procedurally and substantively unconscionable, thus affirming the trial court’s denial of the dealer’s petition to arbitrate.
Appellant contends that Concepcion broadly restricts the application of the unconscionability doctrine to arbitration provisions. However, “ Concepcion did not overthrow the common law contract defense of unconscionability whenever an arbitration clause is involved. Rather, the [c]ourt reaffirmed that the [FAA’s] savings clause preserves generally applicable contract defenses such as unconscionability, so long as those doctrines are not ‘applied in a fashion that disfavors arbitration.’ “ ( Kilgore v. KeyBank, Nat. Assn. (9th Cir.2012) 673 F.3d 947, 963, quoting Concepcion, supra, 131 S.Ct. at p. 1747; see also Truly Nolen, supra, 208 Cal.App.4th at p. 506.) Appellant argues that an unconscionability analysis that focuses on the lack of mutuality or bilaterality in an arbitration provision is “an example of applying a generally applicable contract defense in a manner which disfavors arbitration.” Recent California and federal district court decisions addressing arbitration provisions very similar to that in the present case and in the identical car purchase context have not read Concepcion so broadly. (See Trompeter v. Ally Financial, Inc. (N.D.Cal., June 1, 2012, No. C–12–00392 CW) 2012 WL 1980894 [p. *8] [nonpub. opn.] ( Trompeter ); Smith v. Americredit Financial Services, Inc. (S.D.Cal., Mar. 12, 2012, No. 09cv1076 DMS (BLM)) 2012 WL 834784 [pp. * 2–*4] ( Smith ); Lau v. Mercedes–Benz USA, LLC (N.D.Cal., Jan. 31, 2012, No. CV 11–1940 MEJ) 2012 WL 370557 [pp. *6–*7] ( Lau ); see also Ajamian v. CantorCO2e, L.P. (2012) 203 Cal.App.4th 771, 804, fn. 18.) A conclusion that an adhesive arbitration provision is unconscionable because it is crafted overly in favor of the drafter does not rely on any “judicial policy judgment” disfavoring arbitration. ( Truly Nolen, supra, 208 Cal.App.4th at p. 506.) . . . In any event, the impact of Concepcion is before the California Supreme Court in another car purchase agreement arbitration provision case, Sanchez v. Valencia Holding Company (S199119). The issue presented in that case is “Does the Federal Arbitration Act (9 U.S.C. § 2), as interpreted in AT & T Mobility LLC v. Concepcion (2011) 563 U.S. ____ [131 S.Ct. 1740], preempt state law rules invalidating mandatory arbitration provisions in a consumer contract as procedurally and substantively unconscionable?” Pending the Supreme Court’s ruling on the issue, we find persuasive the decisions in Trompeter, Smith, and Lau, as well as prior California Court of Appeal and Supreme Court decisions analyzing similar claims of substantive unconscionability. (See Truly Nolen, supra, 208 Cal.App.4th at p. 507 [adhering to prior Supreme Court authority on issue not “directly address[ed]” in Concepcion ].) . . . In sum, the arbitration provision is substantively unconscionable. This is not because certain discrete provisions are of greater benefit to appellant; what renders the arbitration provision substantively unconscionable is the fact that the provision is systematically structured to maximize the utility of arbitration in resolving only buyer’s claims, while allowing the car dealer to appeal from a large award or injunctive relief and allowing the dealer to continue to pursue its primary repossession remedy outside of arbitration. (See Armendariz, supra, 24 Cal.4th at p. 120 [“It does not disfavor arbitration to hold that an employer may not impose a system of arbitration on an employee that seeks to maximize the advantages and minimize the disadvantages of arbitration for itself at the employee’s expense.”].)