Case Title: Robinson v. Title Lenders, Inc.

Citation: 

Docket Number: SC91728

State: missouri

Court: Missouri Supreme Court

Date: 2012-03-06T00:00:00Z

Document:
SUPREME COURT OF MISSOURI 
en banc 
 
 
 
LAVERN ROBINSON, 
 
 
 
) 
 
 
 
 
 
 
 
) 
 
Respondent,  
 
 
 
) 
 
 
 
 
 
 
 
) 
v. 
 
 
 
 
 
 
) 
No. SC91728 
 
 
 
 
 
 
 
) 
TITLE LENDERS, INC.,   
 
 
) 
D/B/A MISSOURI PAYDAY LOANS,  
) 
 
 
 
 
 
 
 
) 
 
Appellant. 
 
 
 
 
) 
 
APPEAL FROM THE CIRCUIT COURT OF THE CITY OF ST. LOUIS  
The Honorable Donald L. McCullin, Judge 
 
Opinion issued March 6, 2012 
 
 
At issue in this case is whether a consumer arbitration agreement 
containing a class action waiver is unconscionable and, therefore, unenforceable.  
Title Lenders, Inc., a payday loan company, argues that its arbitration agreement 
containing a class waiver is enforceable and should result in the dismissal of a 
lawsuit brought by Lavern Robinson (Borrower).  Borrower seeks to have the 
arbitration provision or its class waiver declared unenforceable so that she can 
proceed with a class action suit or class arbitration against Title Lenders.    
 
 
1
 
2
                                                
The trial court found that Title Lenders’ arbitration agreement is 
unconscionable and unenforceable because its class waiver deprives borrowers of 
a meaningful remedy.  Title Lenders appeals, and its appeal presents the issue of 
how the United States Supreme Court’s recent decision in AT&T Mobility LLC v. 
Concepcion, ___ U.S. ___ , 131 S.Ct. 1740 (2011), applies in this case.1  
Concepcion held that the Federal Arbitration Act (FAA) preempted a California 
judicial rule that deemed unconscionable most class arbitration waivers in 
consumer contracts.  See 131 S.Ct. at 1746 (noting that the question the court was 
addressing was whether section 2 of the FAA preempted California’s “Discover 
Bank rule,” which classified “most collective-arbitration waivers in consumer 
contracts as unconscionable”).  
 
This Court finds that Concepcion instructs that the trial court erred in 
finding that Title Lenders’ arbitration agreement was unconscionable based on its 
class waiver.  Concepcion indicates that, in light of the FAA’s section 2 “saving 
clause,” the trial court instead should have adjudicated whether the arbitration 
agreement was enforceable in light of Borrower’s evidence relevant to her claims 
regarding ordinary state-law principles that govern contracts but that do not single 
out or disfavor arbitration.  For these reasons, the trial court’s judgment is 
reversed. 
 
1 This Court, acting on its own motion, took transfer of this case prior to its disposition by 
the court of appeals.  Jurisdiction is vested in this Court pursuant to MO. CONST. art. V, 
sec. 10. 
 
Because the trial court has not yet adjudicated Borrower’s 
unconscionability claims that are not related to the arbitration agreement’s class 
waiver, this matter is remanded to the circuit court for further consideration in 
light of Concepcion and this opinion. 
I.  Background 
 
 
From September 2005 to September 2006, Borrower entered into 13 
separate loan agreements with Title Lenders.  Borrower does not contest that each 
of these agreements was approved by the Missouri Division of Finance and 
included all necessary disclosures under state and federal law.  Each of the loan 
agreements signed by Borrower contained Title Lenders’ standard arbitration 
agreement language.  The arbitration provisions explained arbitration, noted that 
some claims still might be resolved in small claims “court,” provided that 
arbitrations would be administered by the American Arbitration Association, and 
indicated that Title Lenders would cover the filing fees and costs for arbitration 
when “it would be unfair or burdensome” for the borrower to pay.  The arbitration 
agreement indicated that Borrower was waiving a jury trial or access to a class 
action, but it did not otherwise contain a waiver of any claims, remedies, or 
damages that would be available to Borrower.  The following language in the 
arbitration agreement noted the class waiver (bolded and capitalized emphasis 
appears in the agreement, underlined emphasis added by this Court): 
Only disputes involving you and us may be addressed in the 
arbitration.  The arbitration may not address any dispute on a “class 
action” basis.  This means that the arbitration may not address 
 
3
disputes between you and us.   
The arbitrator shall have the authority to award any legal or 
equitable remedy or relief that a court in the State of Missouri could 
order or grant.  The arbitrator, however, is not authorized to change 
or alter the terms of this Agreement or to make any award that would 
extend to any loan other than your own. 
BY AGREEING TO ARBITRATE ANY DISPUTE, NEITHER 
YOU NOR WE WILL HAVE THE RIGHT TO LITIGATE THAT 
DISPUTE IN COURT, OR TO HAVE A JURY TRIAL ON THAT 
DISPUTE, OR ENGAGE IN DISCOVERY PROCEEDINGS 
EXCEPT AS PROVIDED FOR ABOVE OR IN THE 
ARBITRATION RULES. FURTHER, YOU WILL NOT HAVE THE 
RIGHT TO PARTICIPATE AS A REPRESENTATIVE OR 
MEMBER OF ANY CLASS PERTAINING TO ANY DISPUTE 
SUBJECT TO ARBITRATION. THE ARBITRATOR’S DECISION 
WILL BE FINAL AND BINDING, EXCEPT TO THE EXTENT IT 
IS SUBJECT TO REVIEW IN ACCORDANCE WITH 
APPLICABLE LAWS GOVERNING ARBITRATION AWARDS, 
OTHER RIGHTS THAT YOU OR WE WOULD HAVE IN COURT 
MAY ALSO NOT BE AVAILABLE IN ARBITRATION. 
 
Borrower signed each of the lending contracts, including the arbitration 
provisions, and her signature was noted to indicate her understanding and 
acceptance of all terms in the agreement.  Borrower attested in a deposition that 
she never was threatened, rushed, pressured, or forced into entering the 
agreements with Title Lenders.  She also indicated, however, that she never read 
the arbitration clauses when she signed the loan contracts.   
 
In October 2006, Borrower sued Title Lenders, alleging that its lending 
practices violated the Missouri Merchandising Practices Act and certain regulatory 
statutes.  Borrower sought to represent herself in the suit, as well as a putative 
class of borrowers who also had obtained payday loans using Title Lenders’ loan 
 
4
agreement form.  Title Lenders, asserting the arbitration provisions signed by 
Borrower, moved to stay Borrower’s suit and to compel her to pursue her claims 
via individual arbitration or in the small claims division of the circuit court.  
Borrower responded that Title Lenders’ class waiver in its loan contract arbitration 
provisions rendered its arbitration agreement unconscionable and, therefore, 
unenforceable.2  Borrower also asserted that Title Lenders’ class waiver would 
effectively immunize it from suits because attorneys would not agree to handle 
borrowers’ cases unless a class action was available.  She argued that the class 
waiver was an exculpatory clause that was unenforceable because it was not clear 
and unambiguous.3   
 
Arguments and briefs were presented to the trial court.  Evidence was 
presented regarding Borrower’s contentions that Title Lenders’ arbitration 
agreement was unconscionable.  Borrower’s evidence sought to emphasize her 
lack of sophistication and her lack of understanding of the agreement.  She also 
raised complaints about the agreement’s print size, location, and clarity, as well as 
the high rate of interest available under the loan contract.  Title Lenders 
                                                 
2 “Unconscionability has two aspects: procedural unconscionability and substantive 
unconscionability.  Procedural unconscionability deals with the formalities of making the 
contract, while substantive unconscionability deals with the terms of the contract itself.”  
State ex rel. Vincent v. Schneider, 194 S.W.3d 853, 858 (Mo. banc 2006) (noting that 
“[p]rocedural unconscionability focuses on such things as high pressure sales tactics, 
unreadable fine print, or misrepresentation among other unfair issues in the contract 
formation process,” whereas “[s]ubstantive unconscionability means an undue harshness 
in the contract terms”).  Missouri does not permit an unconscionable contract or clause of 
a contract to be enforced.  Id. 
3 A clause exculpating a party from liability must be clear and unambiguous.  See Alack 
v. Vic Tanny Int’l of Mo., Inc., 923 S.W.2d 330, 334 (Mo. banc 1996). 
 
5
highlighted that Borrower was not coerced or pressured into entering the 
agreement but rather voluntarily signed it 13 times despite her admissions that she 
did not read or understand it.4  Title Lenders’ evidence also included that 
Borrower admitted to preferring to obtain financing from Title Lenders, though 
she had other sources of financing available from other lenders that did not require 
her to sign an arbitration agreement. 
 
Evidence also was presented regarding Borrower’s arguments that the 
arbitration agreement and its class waiver effectively exculpated Title Lenders 
from suits.  Borrower’s evidence included the testimony of two lawyers who 
opined that consumer lawyers would not take a case like Borrower’s case unless it 
could be pursued as a class action.  Title Lenders countered by arguing that there 
was no evidence that its borrowers had been unsuccessful in retaining counsel to 
pursue individual claims.  Title Lenders sought to compel individual arbitration, 
and Borrower sought to have the class waiver stricken so she could proceed with 
class arbitration or a class action suit.   
                                                 
4 The law is clear that a signor’s failure to read or understand a contract is not, standing 
alone, a defense to the contract.  See Sanger v. Yellow Cab Co., Inc., 486 S.W.2d 477, 
481 (Mo. banc 1972) (“The rule is that the one who signs a paper, without reading it, if 
he is able to read and understand, is guilty of such negligence in failing to inform himself 
of its nature that he cannot be relieved from the obligation contained in the paper thus 
signed, unless there was something more than mere reliance upon the statements of 
another as to its contents[.]” (internal quotations omitted)); see also Repair Masters 
Constr., Inc. v. Gary, 277 S.W.3d 854, 858 (Mo. App. 2009) (“The failure to read a 
document prior to signing it is not a defense, and does not make a contract voidable, 
absent fraud.”). 
 
 
6
 
In March 2009, the trial court granted Title Lenders’ motion to stay 
Borrower’s court case, finding:  “The Court has reviewed the evidence and the 
submissions of the parties and finds that the present dispute is arbitrable … [and] 
must be stayed for arbitration.”  But noting the “unequal bargaining position 
between the parties when the underlying contract was entered into,” the court also 
found:  “[T]he terms of the Arbitration Clause are unduly harsh and not 
commercially reasonable in the prohibition of class actions and the ability to 
arbitrate a class.  As such, the Arbitration Clause is both procedurally and 
substantively unconscionable to the extent that it prohibits class actions.”  The trial 
court’s March 2009 order discussed that the lack of class availability would leave 
Borrower and similarly situated consumers without a practical remedy for their 
relatively small claims.  It stated that the class waiver provisions are 
unconscionable insofar as their “practical effect affords [Title Lenders] immunity” 
from suit.  The trial court additionally found that the class waiver is “exculpatory 
and unenforceable because it is not clear and unambiguous.”  The trial court struck 
the class waiver provisions from the arbitration agreement, but it ordered 
enforcement of the other arbitration provisions absent the class waiver.  
 
Titled Lenders appealed the March 2009 judgment, but its initial appeal 
was dismissed and the case was remanded because the trial court had not 
addressed one of Borrower’s declaratory-relief counts.  While the case was 
pending on remand, the United States Supreme Court held that class arbitration 
could not be compelled absent express consent by the parties.  See Stolt-Nielsen 
 
7
S.A. v. AnimalFeeds Int’l Corp., ___U.S. ___, 130 S.Ct. 1758 (2010).  Borrower 
moved that the trial court, in light of Stolt-Nielsen, deny Title Lenders’ motion to 
stay the suit, and Title Lenders moved that the trial court instead modify its order 
to grant the stay.   
 
In a judgment entered in January 2011, the trial court found that it was 
precluded from ordering arbitration on a class basis but rather only could compel 
individual arbitration.  In support of this holding, the trial court cited Stolt-Neilsen 
and this Court’s opinion in Brewer v. Missouri Title Loans, Inc., 323 S.W.3d 18 
(Mo. banc 2010) (Brewer I), vacated, Missouri Title Loans, Inc. v. Brewer, ___ 
U.S. ___, 131 S.Ct. 2875 (2011),5 wherein this Court had found unconscionable 
and unenforceable a class waiver that was included in an arbitration agreement 
that was part of a title loan contract.  See Brewer I, 323 S.W.3d at 20-24.  Brewer I 
had emphasized that individual arbitration, as opposed to class arbitration, would 
result in the title loan borrower being denied a remedy against the allegedly 
predatory title loan lender.  See id. 
 
The trial court’s January 2011 judgment again highlighted its previous 
concerns that the class waiver is unconscionable, noting that enforcement of the 
                                                 
5 In light of its decision in Concepcion, the United States Supreme Court granted 
certiorari and vacated and remanded this Court’s judgment in Brewer I.  Mo. Title Loans, 
Inc. v. Brewer, ___ U.S. ___, 131 S.Ct. 2875 (2011).  Concurrent to this Court’s 
consideration of Borrower’s case, a different panel of this Court undertook consideration 
of how Concepcion applies to this Court’s previous decision in Brewer I.  This Court’s 
post-remand decision of Brewer I is issued concurrent to this opinion.  Brewer v. Mo. 
Title Loans, Inc., ___S.W.3d ___ (Mo. banc 2012) (No. 90647, decided March 6, 2012) 
(Brewer II).  Application of Concepcion to this case is the central reason this Court took 
transfer of this appeal prior to an opinion by the court of appeals.    
 
8
class waiver would “effectively depriv[e] [Borrower] of any meaningful remedy.”  
And the trial court accordingly vacated its previous stay and overruled Title 
Lenders’ motions to stay and compel arbitration.  Title Lenders appeals. 
II.  Arguments on Appeal 
 
 Title Lenders contends that the trial court erred in refusing to enforce Title 
Lenders’ arbitration agreement.  It argues that the arbitration agreement is not 
unconscionable, and it contends that the class waiver is not an unenforceable 
exculpatory clause.  Title Lenders also maintains that Concepcion instructs that the 
trial court erred in concluding that the class waiver rendered the arbitration 
agreement unconscionable.  Title Lenders requests reversal of the trial court’s 
judgment and asks that the case be remanded with instructions that the trial court 
stay Borrower’s suit and order her to seek redress for her claims through 
individual arbitration.  
III.  Standard of Review 
 
The trial court’s judgment will be affirmed unless there is no substantial 
evidence to support it, it is against the weight of the evidence, or it erroneously 
declares or applies the law.  Woods v. QC Fin. Servs., Inc., 280 S.W.3d 90, 94 
(Mo. banc 2008).  “Missouri contract law applies to determine whether the parties 
have entered a valid agreement to arbitrate.”  State ex rel. Vincent v. Schneider, 
194 S.W.3d 853, 856 (Mo. banc 2006).  Whether the trial court should have 
granted a motion to compel arbitration is a question of law that this Court reviews 
de novo.  Id.   
 
9
IV.  Relevant Caselaw 
A.  Brewer I 
The trial court’s judgment underlying this appeal reflects this Court’s 
previous holding in Brewer I, wherein this Court found a class waiver 
unconscionable and declared an arbitration agreement unenforceable after 
discussing that individual arbitration, as opposed to class arbitration, would 
effectively result in the borrower being denied a remedy.  See 323 S.W.3d at 20-
24.   
Brewer I considered the “interplay” between the FAA and a title loan 
borrower’s state-law unconscionability defenses to the underlying arbitration 
agreement.  Id. at 20.  Brewer I’s holding reflected the Supreme Court’s holding in 
Stolt-Nielsen that “where an arbitration agreement is silent with respect to class 
arbitration, the parties cannot be compelled to submit the dispute to class 
arbitration.”  323 S.W.3d at 20 (citing Stolt-Nielson, 130 S.Ct. at 1774-76, for the 
premise that “arbitration is fundamentally a matter of consent … limited by the 
scope of the arbitration agreement”).  Brewer I concluded that, insofar as “Stolt-
Nielsen requires an affirmative consent to class arbitration before it may be 
compelled,” no party could be forced to proceed with class arbitration.  323 
S.W.3d at 21.  But Brewer I agreed with the trial court’s underlying holding that 
individual arbitration should also not be compelled, as the class arbitration waiver 
at issue was unconscionable and unenforceable.  See 323 S.W.3d at 20-21. 
 
10
Brewer I found that the class arbitration waiver in that case was both 
procedurally and substantively unconscionable.  Id. at 22-23.  And it rejected the 
lender’s contention that the class waiver was a valid and permissible exculpatory 
clause under Missouri law.  Id. at 24.  Brewer I stated:  “Given the FAA’s 
prohibition of class arbitration under the facts of this case and the fact that the 
unconscionable aspects of the arbitration contract are a result of the class 
arbitration waiver, the appropriate remedy is to strike the arbitration agreement in 
its entirety.”  Id.   
The United States Supreme Court, however, granted certiorari in Brewer I 
in May 2011, and it summarily vacated this Court’s judgment and ordered that this 
Court reconsider Brewer I in light of Concepcion.  Mo. Title Loans, Inc. v. Brewer, 
131 S.Ct. 2875 (“Judgment vacated, and case remanded to Supreme Court of 
Missouri for further consideration in light of [Concepcion.]”).6   
                                                 
6 In addition to Brewer I, the United States Supreme Court has cited Concepcion as a 
reason for granting certiorari and vacating and remanding five other decisions:  Branch 
Banking & Trust v. Gordon, ___ U.S. ___, 132 S.Ct. 577 (2011) (an 11th Circuit case in 
which the vacated opinion had held that a class action waiver in a consumer contract was 
unconscionable and in which the consumer had limited viable options for relief; post-
Concepcion decision pending); Sonic-Calabasas A, Inc. v. Moreno, ___ U.S. ___, 132 
S.Ct. 496 (2011) (a Supreme Court of California case addressing arbitration provisions 
found to be substantively unconscionable and raising public policy concerns; post-
Concepcion decision pending); Affiliated Computer Servs., Inc. v. Fensterstock, ___ U.S. 
___, 131 S.Ct. 2989 (2011) (student loan consumer case pending in the 2nd Circuit for 
determinations about the arbitrability of the issues post-Concepcion); Cellco P’ship v. 
Litman, ___ U.S. ___, 131 S.Ct. 2872 (2011) (along with Litman v. Cellco P’ship, ___ 
U.S. ___, 131 S.Ct. 2873 (2011)) (3rd Circuit case determining that, after Concepcion, 
New Jersey law as to unconscionability was preempted by the FAA because the state law 
impermissibly sought to impose class arbitration even when it was not contracted—
Litman v. Cellco P’ship, 655 F.3d 225, 231 (3d Cir. 2011)); Sonic Auto., Inc. v. Watts, 
___ U.S. ___, 131 S.Ct. 2872 (2011) (post-Concepcion, the Supreme Court of South 
 
11
Now that this Court’s arbitration class waiver precedent in Brewer I has 
been vacated by Concepcion, this Court cannot decide Title Lenders’ appeal 
without first determining how Concepcion impacts the enforceability of Title 
Lenders’ arbitration agreement and, specifically, its class waiver. 
B.  Concepcion 
In Concepcion, the United States Supreme Court held that the FAA 
preempts California’s “Discover Bank rule,” which “classif[ied] most collective-
arbitration waivers in consumer contracts as unconscionable.”  See Concepcion, 
131 S.Ct. at 1751-52.7  
Until Concepcion, Discover Bank had provided for California courts: 
[Not all] class action waivers [in arbitration agreements] are 
necessarily unconscionable.  But when the waiver is found in a 
consumer contract of adhesion in a setting in which disputes 
between the contracting parties predictably involve small amounts of 
damages, and when it is alleged that the party with the superior 
bargaining power has carried out a scheme to deliberately cheat 
large numbers of consumers out of individually small sums of 
money, then, at least to the extent the obligation at issue is governed 
by California law, the waiver becomes in practice the exemption of 
the party “from responsibility for [its] own fraud, or willful injury to 
the person or property of another.” [California Civ. Code, sec. 1668.] 
Under these circumstances, such waivers are unconscionable under 
California law and should not be enforced. 
 
                                                                                                                                                 
Carolina reinstated its vacated opinion in this case, as it found that the FAA preemption 
issues were not preserved; the opinion had determined that class waivers applicable to 
automobile buyers violated the state’s law and public policy protective of automobile 
buyers’ rights to bring class suits—see Herron v. Century BMW, 693 S.E.2d 394, 400 
(2010), vacated sub nom. Sonic Auto., Inc. v. Watts, 131 S. Ct. 2872, opinion reinstated 
719 S.E.2d 640, 645 (S.C. 2011)). 
7The opinion of the Supreme Court was authored by Justice Scalia, who was joined by 
Chief Justice Roberts and Justices Kennedy, Alito, and Thomas.  Justice Thomas also 
authored a concurring opinion. 
 
12
Discover Bank v. Superior Court, 113 P.3d 1100, 1110 (2005), abrogated by 
Concepcion, 131 S.Ct. 1740.  Concepcion declared that California’s “Discover 
Bank rule” was preempted by the FAA because the rule was “an obstacle to the 
accomplishment and execution of the full purposes and objectives of Congress” in 
enacting the FAA.  131 S.Ct. at 1753 (internal quotations omitted). 
 
In finding the “Discover Bank rule” untenable under the FAA, Concepcion 
highlighted that the FAA was enacted to protect arbitration agreements from 
judicial hostility toward arbitration.  131 S.Ct. at 1745.  Concepcion discussed that 
the application of the “Discover Bank rule” had resulted in courts ordering class 
arbitrations even when class arbitration was not mutually consented to by the 
parties8 or when class arbitration was not more beneficial to consumers.  See 
Concepcion, 131 S.Ct. at 1750-52.   
 
Concepcion reasoned that the “Discover Bank rule,” as it was applied by 
the courts, violated the spirit of the FAA by undermining the FAA’s intent to place 
arbitration agreements on equal footing with other contracts and to enforce 
arbitration agreements by their terms.  See Concepcion, 131 S.Ct. at 1745-46.   
The Supreme Court emphasized that the FAA places arbitration agreements on 
equal footing with other contracts because the FAA’s “saving clause” “preserves 
generally applicable contract defenses.”  Id. at 1748.  The “saving clause” allows 
an arbitration agreement to be declared unenforceable “upon such grounds as exist 
                                                 
8 The Supreme Court previously had declared that mutual consent was necessary to 
compel class arbitration.  See Stolt-Nielsen, 130 S.Ct. at 1775-76. 
 
13
at law or in equity for the revocation of any contract.”  See 9 U.S.C. sec. 2.  And, 
as such, the FAA’s “saving clause” permits arbitration agreements “to be 
invalidated by generally applicable contract defenses, such as fraud, duress, or 
unconscionability, but not by defenses that apply only to arbitration or that derive 
their meaning from the fact that an agreement to arbitrate is at issue.”  
Concepcion, 131 S.Ct. at 1746 (internal quotations omitted).9 
Concepcion concluded that the “Discover Bank rule” was preempted by the 
FAA because “nothing [in the FAA’s ‘saving clause’] suggests an intent to 
preserve state-law rules that stand as an obstacle to the accomplishment to the 
                                                 
9 Justice Thomas’ concurrence noted that he “reluctantly join[ed] the Court’s opinion.”  
Concepcion, 131 S.Ct. at 1754 (Thomas, J. concurring).  His concurrence articulated his 
position that the FAA’s section 2 “saving clause,” read in light of FAA section 4, 
preserves for consideration only “grounds related to the making of [an arbitration] 
agreement.”  Id. at 1754-55 (Thomas, J. concurring) (reasoning that enforcement of an 
agreement to arbitrate is required unless a defense concerning the formation of the 
agreement applies, such as fraud, duress, or mutual mistake).  He opined:  “Contract 
defenses unrelated to the making of the agreement—such as public policy—could not be 
the basis for declining to enforce an arbitration clause.”  Id. at 1755 (Thomas, J. 
concurring).  And he articulated that the “Discover Bank rule” was preempted by the 
FAA and should not be used to invalidate an arbitration agreement because the rule 
involved a refusal to enforce an agreement based on public-policy concerns about 
exculpatory provisions, which had nothing to do with whether the agreement itself was 
“properly made.”  See id. at 1756 (Thomas, J. concurring).  Justice Thomas noted past 
Supreme Court cases that had applied defenses relevant to the formation of a contract.  
Id. at 1755 (Thomas, J. concurring) (“In Doctor’s Associates, Inc. v. Casarotto, [517 U.S. 
681, 687 (1996)], this Court said that fraud, duress, and unconscionability ‘may be 
applied to invalidate arbitration agreements without contravening [sec.] 2.’  All three 
defenses historically concern the making of an agreement.  See Morgan Stanley Capital 
Group Inc. v. Public Util. Dist. No. 1 of Snohomish Cty., [554 U.S. 527, 547 (2008)] 
(describing fraud and duress as ‘traditional grounds for the abrogation of [a] contract’ 
that speak to ‘unfair dealing at the contract formation stage’); Hume v. U.S., [132 U.S. 
406, 411, 414 (1889)] (describing an unconscionable contract as one ‘such as no man in 
his senses and not under delusion would make’ and suggesting that there may be 
‘contracts so extortionate and unconscionable on their face as to raise the presumption of 
fraud in their inception.’ (internal quotation marks omitted))”). 
 
14
FAA’s objectives.”  Id. at 1748.  The Supreme Court noted that, in effect, the 
California courts’ application of the “Discover Bank rule” resulted in the 
invalidation of most arbitration agreement class waivers and compelled class 
arbitrations.  See id. at 1750 (noting that California’s “Discover Bank rule” 
interferes with arbitration because it “does not require classwide arbitration, [but] 
allows any party to a consumer contract to demand it ex post” when there is an 
adhesion contract, which covers most consumer contracts).  The “Discover Bank 
rule” disfavored the terms of arbitration agreements as they were agreed to by the 
parties, and it impermissibly stretched the FAA’s “saving clause” considerations 
by applying California’s state-law unconscionability analysis in a way that singled 
out and disfavored arbitration agreements.  Id. at 1747-48.  Concepcion articulated 
that the application of the “Discover Bank rule” to essentially “[r]equir[e] the 
availability of classwide arbitration interfere[d] with [the] fundamental attributes 
of arbitration and thus create[d] a scheme inconsistent with the FAA.”  Id. at 1748. 
Concepcion outlined concerns that class arbitrations can be unfair to parties 
who agree to individual arbitration only, potentially can disadvantage corporate 
defendants, and can result in unfairness to potential co-plaintiffs who remain 
unaware of the class proceedings.  See id. at 1750-52.  Concepcion reasoned that 
class arbitrations, in contrast to individual arbitrations, undermine arbitration 
hallmarks like informality and unreviewability of results.  See id. at 1749-51.  
Concepcion expressed disfavor for any state-law rule that forced class arbitrations 
because “[t]he point of affording parties discretion in designing arbitration 
 
15
processes is to allow for efficient, streamlined procedures tailored to the type of 
dispute … [a]nd the informality of arbitral proceedings is itself desirable, reducing 
the cost and increasing the speed of dispute resolution.” Id. at 1749. 
 
In contrast to the majority opinion’s concerns about class arbitration, the 
dissenting opinion in Concepcion10 emphasized the benefits of class arbitration, 
especially to protect consumers with small-dollar claims that might not be 
remedied if class relief was unavailable.  See Concepcion, 131 S.Ct. at 1760-61 
(Breyer, J.  dissenting).  The majority’s opinion, however, suggested that the 
dissent failed to recognize that the FAA preempts any state-law procedure that is 
inconsistent with the FAA’s purposes, even if the state-law result otherwise would 
be desirable.  See id., at 1753.  It also reasoned that, under the specific facts of 
Concepcion, there was limited concern that the claimants’ small-dollar claims 
would remain unresolved even absent the availability of class arbitration.  Id.  The 
majority opinion noted that the arbitration agreement terms at issue in Concepcion 
were actually beneficial to the consumers, even if they did not proceed as a class.  
See id.11 
                                                 
10 The dissent was authored by Justice Breyer and joined by Justices Ginsburg, 
Sotomayor, and Kagan.  The dissent emphasized “federalist principles” and noted that 
state law should control the enforceability of contracts.  See Concepcion, 131 S.Ct. at 
1762 (Breyer, J.  dissenting).  The dissenting opinion concluded that the “Discover Bank 
rule” did not violate the FAA because the “saving clause” of the FAA intended to allow 
the states to continue to apply state contractual defenses, including unconscionability 
defenses, to invalidate arbitration agreements so long as the defenses were applied 
equally to class waivers in arbitration and in contracts.  Id. at 1756-57 (Breyer, J. 
dissenting).   
11 Concepcion discussed:   
 
16
V.  Application of Concepcion 
 
Concepcion instructs clearly that a court cannot invalidate an arbitration 
agreement on the sole basis that it contains a class waiver.  Id. at 1748.  As such, 
Concepcion invalidates this Court’s reasoning in Brewer I that concluded that the 
unconscionable aspects of the arbitration agreement in that case were “a result of 
the class arbitration waiver.”  See Brewer I, 323 S.W.3d at 24; see also Ruhl v. 
Lee’s Summit Honda, 322 S.W.3d 136 (Mo banc. 2010) (citing Brewer I’s 
unconscionability reasoning and invalidating an entire arbitration agreement when 
the class waiver was found unconscionable).  Concepcion, however, does not 
require that courts simply must declare that an arbitration agreement containing a 
class waiver is enforceable.  Concepcion reiterates that courts assessing the 
enforceability of an arbitration agreement must continue to consider the 
enforceability of an arbitration agreement in light of the section 2 “saving clause.”  
See 131 S.Ct. at 1746-48.  As such, arbitration agreements are tested through a 
                                                                                                                                                 
[T]he claim here was most unlikely to go unresolved. As noted earlier, the 
arbitration agreement provides that AT&T will pay claimants a minimum 
of $7,500 and twice their attorney's fees if they obtain an arbitration award 
greater than AT&T's last settlement offer. The District Court found this 
scheme sufficient to provide incentive for the individual prosecution of 
meritorious claims that are not immediately settled, and the Ninth Circuit 
admitted that aggrieved customers who filed claims would be essentially 
guaranteed to be made whole[.]  Indeed, the District Court concluded that 
the Concepcions were better off under their arbitration agreement with 
AT&T than they would have been as participants in a class action, which 
could take months, if not years, and which may merely yield an 
opportunity to submit a claim for recovery of a small percentage of a few 
dollars.  
131 S.Ct. at 1753 (internal quotations and citations to underlying district court opinions 
omitted). 
 
17
lens of ordinary state-law principles that govern contracts, and consideration is 
given to whether the arbitration agreement is improper in light of generally 
applicable contract defenses.  See Cruz v. Cingular Wireless, LLC, 648 F.3d 1205, 
1210 (11th Cir. 2011) (indicating that the FAA’s section 2 “saving clause” and 
Concepcion permit the analysis of whether a class waiver in an arbitration 
agreement is enforceable to include consideration of whether the arbitration 
agreement is valid in light of generally applicable contract defenses).  An 
arbitration agreement could be declared unenforceable if a generally applicable 
contract defense, such as fraud, duress, or unconscionability, applied to concerns 
raised about the agreement.  Cf. 131 S.Ct. at 1746 (“saving clause permits 
agreements to arbitrate to be invalidated by generally applicable contract defenses, 
such as fraud, duress, or unconscionability” (internal quotations omitted)).   
 
Concepcion, however, will not allow an arbitration agreement to be 
invalidated by any defense that is applied in a way that singles out or disfavors 
arbitration, as Concepcion instructs that no state-law rule that is “an obstacle to the 
accomplishment of the FAA’s objectives” should be applied to invalidate an 
arbitration agreement.  See 131 S.Ct. at 1748; see also Cruz, 648 F.3d at 1210-11 
(noting that Concepcion rejected the “Discover Bank rule” because it “was cast as 
an application of unconscionability doctrine, [but] in effect, it set forth a state 
policy placing bilateral arbitration categorically off-limits for certain categories of 
consumer fraud cases, upon the mere ex post demand by any consumer”).  Any 
state-law rule testing the enforceability of an arbitration agreement cannot 
 
18
“interfer[e] with fundamental attributes of arbitration” or “creat[e] a scheme 
inconsistent with the FAA.”  See Concepcion, 131 S.Ct. at 1748.  As such, post-
Concepcion, a court should not invalidate an arbitration agreement in a consumer 
contract simply because it is contained in a contract of adhesion or because the 
parties had unequal bargaining power, as these are hallmarks of modern consumer 
contracts generally.  See id. at 1750 (noting that “the times in which consumer 
contracts were anything other than adhesive are long past”); Cruz, 648 F.3d at 
1215 (reasoning that, post-Concepcion, the fact that an arbitration agreement is 
contained in an adhesion contract is not alone sufficient to invalidate the 
agreement).  
 
Moreover, post-Concepcion, courts may not apply state public policy 
concerns to invalidate an arbitration agreement even if the public policy at issue 
aims to prevent undesirable results to consumers.  See Concepcion, 131 S.Ct. at 
1753 (rejecting consumers’ public policy concerns about small-dollar claims 
slipping through the legal system because states “cannot require a procedure that is 
inconsistent with the FAA, even if it is desirable for unrelated reasons”); see also 
Cruz, 648 F.3d at 1212-13 (discussing that Concepcion does not permit the 
decision about the viability of the class waiver in the arbitration agreement to rest 
on sympathies for arguments that class arbitration is the best mechanism to protect 
the small-value claims of numerous consumers; rejecting applying Florida law in a 
way that would require availability of class arbitration to guard consumers against 
the risks that small-dollar claims will not be brought unless plaintiffs can proceed 
 
19
as a class; and declaring that such a state rule would be inconsistent with and 
preempted by the FAA).12  Applying state-law policy considerations as the basis 
for invalidating an arbitration agreement is preempted by the FAA because it 
creates an impermissible “obstacle to the FAA’s objective of enforcing arbitration 
                                                 
12 There are policy concerns that a class action waiver in an arbitration agreement can 
become a de facto exculpatory provision because it eliminates an incentive to detect or 
pursue small-value claims.  But this policy concern about whether a class waiver is 
impermissibly exculpatory seemingly was rejected in Concepcion, insofar as it “observed 
that California’s Discover Bank rule [had] ‘its origins in California’s unconscionability 
doctrine and California’s policy against exculpation.’”  Cruz, 648 F.3d at 1214 (citing 
Concepcion, 131 S.Ct. at 1746, for the proposition that Concepcion rejected the 
plaintiffs’ policy arguments regarding whether the waiver was exculpatory). 
 
In Cruz, the Eleventh Circuit refused to “reach the question of whether 
Concepcion leaves open the possibility that in some cases, an arbitration agreement may 
be invalidated on public policy grounds where it effectively prevents the claimant from 
vindicating her statutory cause of action” because the agreement at issue in Cruz was the 
same AT&T consumer-relief-favorable agreement that was upheld in Concepcion.  Cruz, 
648 F.3d at 1215.  Cruz noted there was conflicting caselaw on the issue.  See id. at n.13 
(citing “Chen-Oster v. Goldman, Sachs & Co., [2011 WL 2671813, *3–5 (S.D.N.Y. July 
7, 2011)] (denying motion for reconsideration in light of Concepcion of order 
invalidating arbitration agreement because it did not allow for class proceedings, based 
on conclusion that individual arbitration would preclude plaintiff from enforcing her 
‘substantive right under Title VII to bring a pattern or practice claim’ which under 
governing substantive law may only be brought as a class); but cf. Gilmer v. 
Interstate/Johnson Lane Corp., [500 U.S. 20, 32 (1991),] (holding that the inability to 
arbitrate on a classwide basis was not an appropriate ground for refusing to enforce an 
arbitration provision with respect to statutory Age Discrimination in Employment Act 
claim)”). 
 
In a case that, like Brewer I, was remanded by the Supreme Court in light of its 
decision in Concepcion, the Third Circuit concluded that the FAA preempts New Jersey 
law that had instructed that a class action waiver in a consumer adhesion contract was 
unconscionable and unenforceable because it functionally exculpated the defendant from 
small-dollar claims.  See Litman, 655 F.3d at 229-31 (declaring “the holding of 
Concepcion [is] both broad and clear:  a state law that seeks to impose class arbitration 
despite a contractual agreement for individualized arbitration is inconsistent with, and 
therefore preempted by, the FAA, irrespective of whether class arbitration ‘is desirable 
for unrelated reasons’”) (quoting Concepcion at 1753)); see also Black v. JP Morgan 
Chase & Co., 2011 WL 3940236 (W.D. Pa. Aug. 25, 2011) (report and recommendation 
adopted by 2011 WL 4089411 (W.D. Pa. Sept. 14, 2011) (discussing and applying the 
Litman holding in declaring that the FAA preempts Pennsylvania law that holds class 
action waivers in arbitration agreements are unconscionable and unenforceable).   
 
 
20
agreements according to their terms.”  Cruz, 648 F.3d at 1212-13.  As noted in this 
Court’s companion opinion in Brewer II, this Court’s conclusion that the FAA 
does not allow state-law policy considerations to be used to invalidate an 
arbitration agreement recently was confirmed by the Supreme Court’s holding in 
Marmet Health Care Center, Inc., v. Brown, ___ U.S. ___ (2012) (reversing a 
state court ruling holding that the FAA did not preempt the state’s public policy 
against predispute arbitration agreements related to personal injury and wrongful 
death claims against nursing homes; finding that the state court’s application of a 
public policy rationale was contrary to Concepcion and the terms of the FAA; and 
remanding for additional findings regarding whether, absent a public policy 
rationale, the arbitration clause at issue was “unenforceable under state common 
law principles that are not specific to arbitration and pre-empted by the FAA”). 
VI.  Is Title Lenders’ Arbitration Agreement Enforceable? 
 
The issue to be determined in this appeal is whether the trial court erred in 
finding that Title Lenders’ arbitration agreement was unenforceable.   
 
In this case, Borrower raised multiple arguments challenging the 
enforceability of Title Lenders’ arbitration agreement based on Missouri’s contract 
law prohibitions against unconscionable agreements.13  The trial court’s judgment, 
                                                 
13 Borrower’s arguments that the arbitration agreement should not be enforced based on 
unconscionability included:  Borrower and Title Lenders had unequal bargaining power; 
the contract was a take-it-or-leave-it, pre-printed form contract; the arbitration agreement 
was “boilerplate” language and then included a class waiver on the back of the 
agreement; the agreement was in fine print and difficult to read; Borrower did not 
understand the language of the arbitration agreement and did not know the meaning of 
 
21
however, was based solely on its determination that the arbitration agreement was 
unconscionable because its terms were “unduly harsh and not commercially 
reasonable in the prohibition of class actions and the ability to arbitrate as a class.”  
The trial court refused to enforce Title Lenders’ arbitration agreement on the basis 
that it contained class waiver provisions that the court determined would 
impermissibly deprive Borrower of a meaningful remedy. 
 
Pursuant to Concepcion, the trial court clearly erred in finding that Title 
Lenders’ arbitration agreement was unenforceable based on its class waiver.  
Concepcion instructs that, instead of limiting its unconscionability considerations 
to the presence of the class waiver, the trial court should have assessed whether 
the arbitration agreement was enforceable in light of Borrower’s additional 
arguments regarding ordinary state-law principles that govern contracts but that do 
not single out or disfavor arbitration.14   
                                                                                                                                                 
arbitration; the arbitration agreement is difficult for payday loan customers to understand;  
the interest rate on the loan made under the agreement could reach 515 percent; and the 
arbitration agreement’s class wavier effectively exculpated Title Lenders from suit.   
14 See Marmet, ___ U.S. ___ (2012) (remanding for additional findings regarding 
whether, absent a public policy rationale, the arbitration clause at issue in the case was 
“unenforceable under state common law principles that are not specific to arbitration and 
pre-empted by the FAA”); see also Mission Viejo Emergency Med. Assocs. v. Beta 
Healthcare Grp., 197 Cal.App.4th 1146, 1158 (2011) (citing Concepcion, 131 S.Ct. at 
1746, for the proposition that “[g]eneral state[-]law doctrine pertaining to 
unconscionability is preserved unless it involves a defense that applies ‘only to arbitration 
or that derive[s][its] meaning from the fact that an agreement to arbitrate is at issue’”).  
Post-Concepcion, Borrower’s arguments that allege unconscionability relating to unequal 
bargaining power are undermined.  Cf. Black, 2011 WL 3940236 (W.D. Pa. Aug. 25, 
2011) (noting that “superior bargaining power alone without the element of 
unreasonableness does not permit a finding of unconscionability or unfairness); see also 
Wallace v. Ganley Auto Grp., 2011 WL 2434093 (Ohio App. June 16, 2011) (discussing 
that in addition to an unequal bargaining position, there must be evidence that, as a result 
 
22
 
23
                                                                                                                                                
 
Because the trial court’s judgment adjudicated only Borrower’s claim of 
unconscionability based on the class waiver, it did not adjudicate Borrower’s other 
claims of unconscionability.  As such, there remain factual issues relevant to 
determining whether Title Lenders’ arbitration agreement was properly declared 
unenforceable based on Borrower’s arguments alleging unconscionability that 
remain relevant post-Concepcion.  As the fact-finder, the trial court should assess 
the evidence in this case and determine if the underlying arbitration agreement is 
enforceable in light of Concepcion’s instructions. 
VII.  Conclusion 
 
For the foregoing reasons, the trial court’s judgment is reversed, and the 
case is remanded. 
 
 
 
 
 
 
 
 
_________________________ 
 
 
 
 
 
 
 
Mary R. Russell, Judge 
 
Teitelman, C.J., Breckenridge,  
Fischer, Stith and Price, JJ.,  
and Wolff, Sr.,J., concur.  
Draper, J., not participating. 
 
of the unequal bargaining positions of the parties, the weaker party was defrauded or 
coerced into agreeing to the arbitration provisions).