A district court judge in the Northern District of California rejected the argument of the attorneys of a defendant seeking to compel arbitration of claims concerning a debt collector’s policy and practice of secretly recording telephone calls with persons located in California without their consent. Instead of attacking the class action waiver in the agreements, attorneys for the plaintiffs focused on whether the agreement was unconscionable as a whole. The court found that the arbitration agreement was unconscionable and unenforceable under California law and that severance of the unconscionable provisions was unwarranted. In the decision, the court found that the United States Supreme Court’s decision in AT&T Mobility v. Concepcion, 131 S.Ct. 1740 (2011), maintained that “state law bearing on contracts of adhesion remains good law.” The Court also distinguished the Ninth Circuit’s decision in Kilgore v. KeyBank, National Association, 673 F.3d 947 (9th Cir. 2012) because the case at hand did not “involve a categorical rule barring arbitration of a specific type of claim or remedy and the Court’s ruling does not rest on an independent state public policy disfavoring arbitration.”
The Federal Housing Finance Agency as conservator for Fannie Mae and Freddie Mac filed suit against a number of financial institutions. The suits allege, among other things, violations of federal securities laws and common law in the sale of residential private-label mortgage-backed securities. The entities sued include:
1. Ally Financial Inc. f/k/a GMAC, LLC
2. Bank of America Corporation
3. Barclays Bank PLC
4. Citigroup, Inc.
5. Countrywide Financial Corporation
6. Credit Suisse Holdings (USA), Inc.
7. Deutsche Bank AG
8. First Horizon National Corporation
9. General Electric Company
10. Goldman Sachs & Co.
11. HSBC North America Holdings, Inc.
12. JPMorgan Chase & Co.
13. Merrill Lynch & Co. / First Franklin Financial Corp.
14. Morgan Stanley
15. Nomura Holding America Inc.
16. The Royal Bank of Scotland Group PLC
17. Société Générale