Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_11-cv-00544/USCOURTS-casd-3_11-cv-00544-1/pdf.json

Nature of Suit Code: 480
Nature of Suit: Consumer Credit
Cause of Action: 28:1331 Fed. Question

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1 11cv544-BTM (BGS)

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

CHAD H. HAMBY, et al.,

Plaintiffs,

Case No. 11cv544-BTM (BGS)

ORDER RE EX PARTE

APPLICATION FOR DISCOVERY

AND STAY OF MOTION TO

COMPEL ARBITRATION

v.

POWER TOYOTA IRVINE, et al.,

Defendants.

Plaintiff moves ex parte for an order permitting him to conduct discovery on the issue

of whether the arbitration clause and class action waiver are unconscionable and an order

continuing the hearing date for Defendant’s motion to compel arbitration. 

Plaintiff asserts that under California Civil Code section 1670.5(b), he is entitled to

discovery on this issue. This section confers Plaintiff with “a reasonable opportunity to

present evidence as to [a contract’s] commercial setting, purpose, and effect” to aid the court

in determining if the contract or any clause thereof is unconscionable.” § 1670.5(b).

Although it is less than clear that this right “to present evidence” is equivalent to a right to

obtain discovery materials to be used to argue that a contract or clause is unconscionable,

there is limited authority for Plaintiff’s position. See Wobb v. Ford Motor Co., 76 F.R.D. 452,

458 (W.D. Pa. 1977); Carlson v. General Motors Corp., 883 F.2d 287, 293 (4th Cir. 1989).

Additionally, although neither side addresses this case, at least one court applying Ninth

Case 3:11-cv-00544-BTM-BGS Document 25 Filed 07/18/11 Page 1 of 3
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 This rule had classified most collective-arbitration waivers in consumer contracts as

unconscionable. See AT&T Mobility LLC v. Concepcion, 131 S. Ct. at 1746.

2 11cv544-BTM (BGS)

Circuit precedent has held that a party opposing a motion to compel arbitration is entitled to

discovery relevant to the issue of unconscionability. See Coneff v. AT&T Corp., No.

C06-0944RSM, 2007 U.S. Dist. LEXIS 20502, at *9 (W.D. Wash. Mar. 9, 2007). Absent

Defendant citing – or independent research uncovering – any case law to the contrary, the

Court finds Coneff persuasive on this issue.

Rather than challenge Plaintiff’s right to discovery, the gravamen of Defendant’s

opposition is focused on the merits of whether Plaintiff can successfully argue that the

arbitration clause at issue is unconscionable. Defendant is correct that after the Supreme

Court’s recent decision in AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740, 1750-1751

(2011), Plaintiff can no longer rely on California’s Discover Bank rule1 to assert that the

arbitration agreement is substantively unconscionable merely because it includes a class

action waiver. See Bellows v. Midland Credit Mgmt., No. 09CV1951-LAB, 2011 U.S. Dist.

LEXIS 48237, at *11 (S.D. Cal. May 4, 2011); In re Cal. Title Ins. Antitrust Litig., No.

08-01341 JSW, 2011 U.S. Dist. LEXIS 71621, at *11 (N.D. Cal. June 27, 2011). However,

AT&T Mobility LLC does not stand for the proposition that a party can never oppose

arbitration on the ground that the arbitration clause is unconscionable. See Shroyer v. New

Cingular Wireless Servs., 498 F.3d 976, 981 (9th Cir. Cal. 2007) (“It is well-established that

unconscionability is a generally applicable contract defense, which may render an arbitration

provision unenforceable.”)

For these reasons, Plaintiff’s ex parte application is GRANTED. Plaintiff may conduct

discovery on the issue of unconscionability, and the hearing date for the motion to compel

arbitration is taken off calendar. Magistrate Judge Skomal shall decide the scope of

discovery and all applicable deadlines. Magistrate Judge Skomal’s chambers shall contact

this Court’s chambers to obtain a new hearing date for the motion to compel arbitration, as

well as deadlines for the parties to file an amended opposition and reply. The hearing date

and amended briefing schedule for the motion to compel arbitration shall be included in the

Case 3:11-cv-00544-BTM-BGS Document 25 Filed 07/18/11 Page 2 of 3
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3 11cv544-BTM (BGS)

discovery scheduling order. 

IT IS SO ORDERED.

DATED: July 18, 2011

Honorable Barry Ted Moskowitz

United States District Judge

Case 3:11-cv-00544-BTM-BGS Document 25 Filed 07/18/11 Page 3 of 3