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.”

Trumpeter v. Ally Financial, No. 12-00392 (N.D. Cal.) (Wilken, J.)