Court Opinion

ID: 9412843
Source: CourtListenerOpinion
Date Created: 2023-08-01 19:05:53.151903+00
Date Added: 2024-06-11T16:39:27.289391
License: Public Domain

Filed 8/1/23 Le v. Elevate Credit CA2/2
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                         SECOND APPELLATE DISTRICT

                                        DIVISION TWO

DANH LE,                                                               B319914

         Plaintiff and Appellant,                                      (Los Angeles County
                                                                       Super. Ct. No. 21STCP03900)
         v.

ELEVATE CREDIT, INC. et al.,

         Defendants and Respondents.

     APPEAL from an order of the Superior Court of
Los Angeles County. Kristin S. Escalante, Judge. Affirmed.

      Zimmerman Reed, Caleb Lucas-Hansen Marker and
Flinn T. Milligan for Plaintiff and Appellant.

     Morrison & Foerster, Nancy R. Thomas, Matthew E.
Ladew, and James R. Sigel for Defendants and Respondents.

                           ______________________________
       Plaintiff and appellant Danh Le (Le) took out 17 separate
loans from defendant and respondent Rise Credit of California,
LLC (Rise Credit).1 After either cancelling these loans or paying
them back in full, Le initiated an arbitration proceeding, alleging
that the interest rates to which he had agreed were
unconscionable. The arbitrator denied Le’s claims, and Le
petitioned the trial court to vacate the arbitration award. The
trial court denied Le’s petition, and Le appeals.
       We affirm.
                    FACTUAL BACKGROUND
I. The parties
       A. Le
       Le is a highly educated software engineer. After
immigrating to the United States in 1975, he earned a B.S. and
an M.S. from the Georgia Institute of Technology. He then began
to work for well-known companies, including Boeing, Raytheon,
Hughes, and General Research Corporation, and he continued to
do so during the time when he obtained the loans at issue and
through the date of the arbitration hearing. Le took all his
coursework in English; he does his engineering work, for which
he obtained a classified clearance, in English; and he testified in
English with “no difficulty” at the arbitration hearing.
       B. Rise Credit
       Rise Credit’s “business practice is to provide access to credit
to non-prime borrowers.” It offers unsecured consumer loans at
interest rates commensurate with the level of risk it incurs when

1
      Elevate Credit, Inc. (Elevate), is also a respondent on
appeal. As explained by the arbitrator, “Elevate provides loan
services to Rise [Credit], which is . . . the ultimate lender to
consumers.”

                                  2
it offers those loans. Rise Credit does not sue borrowers who
default, which increases costs. Its interest rates also reflect its
other costs, including: (1) origination costs (including
advertising, underwriting, and payments to third-party vendors
for applicant credit data); (2) servicing costs; (3) costs of funds;
and (4) costs of consumer-facing contractual provisions, including
a five-day rescission window and no prepayment penalties.
       The lender uses an underwriting model that “pull[s] from
several credit bureaus [and] data sources up to 10,000 different
variables to . . . assess the capacity and the ability to repay.” It
employs “35 to 40 data scientists on staff that are focused on
. . . making the right decision and considering the capacity and
the ability for a consumer to repay.”
II. Rise Credit’s loan agreements
       When Rise Credit offers borrowers loans at the challenged
interest rates, it provides them both time to decide and notice
about the rates. Applicants have 10 days to decide whether to
accept, and roughly 20 percent of borrowers opt not to take the
loan. Even after a borrower accepts a loan, he or she has at least
five days to change his mind and cancel it with no penalty.
       In each loan agreement, just below the table with the
payment summary, Rise Credit includes a bold, all-caps
“WARNING” advising borrowers to consider other financing
options: “This Loan is not meant to help with your long-term
credit needs. Repeated or frequent use can create serious
financial problems for you. We encourage you to think about the
costs and benefits of all alternatives before borrowing.” (Bolding
omitted.)
       Le’s loan agreements also contained an arbitration
provision. Le’s arbitration agreement with Rise Credit provides

                                 3
that, in addition to the grounds enumerated in the Federal
Arbitration Act, the parties have “the right to judicial review of
(a) whether the findings of fact rendered by the arbitrator are
supported by substantial evidence and (b) whether the
conclusions of law are erroneous under the substantive law of
California and applicable federal law.”
III. Le’s loans
       From 2017 to 2019, Le executed 17 agreements with Rise
Credit, each for $3,500 loans, quickly rescinding or repaying
them each time. Although Le initially responded to a mailer from
Rise Credit, he testified that he did not need a mailer to find or
apply for a loan, and he could not even remember details about
which lenders had sent him mailers.
       Of his 17 loans, Le canceled six of them free of charge. As
for the other 11 loans, Le repaid them all in “about 25 days”—
taking advantage of provisions allowing borrowers to pay off their
loans early with no prepayment penalty. At the time, Rise
Credit’s applicable interest rate for first-time borrowers was
135 percent to 235 percent (though the rates on Le’s loans were
all slightly under 200 percent). In total, Le “paid just a little over
$7,500 in interest for all of his Rise [Credit] loans over just under
three years, a small portion of the overall debt” of $59,500.
       These 17 Rise Credit loans were not the only ones Le
secured. During this same period, Le also availed himself of
many other options, including friends and family, credit cards,
credit union loans, 401(k) loans, and unsecured loans from at
least six of Rise Credit’s competitors. The loans that Le took out
from Rise Credit’s competitors similarly bore interest rates of
130 percent to 230 percent. Although Le suggested that “he had
some personal need for funds mostly to help family members,” he

                                  4
has never identified “any medical urgency or other necessities of
life for which he needed money.”
IV. Legislature adopts a rate cap after Le originated his loans
       In 2020, the California Legislature amended the Finance
Code to prelude lenders from charging more than 36 percent
interest on loans between $2,500 and $10,000. (Fin. Code,
§ 22304.5.) Because loans to nonprime borrowers would no
longer be profitable at this interest rate given their credit profiles
and related credit risks, Rise Credit stopped offering its product
in California.
       Le originated all of his loans before this change to the
Finance Code, and he acknowledges that the recently amended
statute does not apply to any of his loans.
                 PROCEDURAL BACKGROUND
I. The arbitration proceeding and award
       In or around June 2020, Le initiated the underlying
arbitration proceeding against Rise Credit and Elevate, alleging
claims stemming from his loans. By the time of the hearing, the
“material issues of fact” were limited to “whether the interest
rates at issue were unconscionable and unlawful” and whether
Rise Credit’s “conduct in entering into the loans was ‘willful’ such
that it could affect the unconscionability analysis[.]”
       During the hearing, among other things, Rise Credit
presented a demonstrative exhibit (a “slider”) showing the
various ways Le could customize his loan terms when he
borrowed from the lender. Le testified when he first applied for
the loan with Rise Credit, or at any time during his loans with
Rise Credit, he never saw the “slider” regarding his loans.

                                  5
      After a multiday hearing, the arbitrator issued a detailed
26-page award, finding the interest rate in this case “shockingly
high,” but rejecting Le’s claim that the rate was unconscionable.
      As relevant here, the arbitrator found that Rise Credit’s
“business practice is to provide access to credit to non-prime
borrowers, who were not overly pressured into entering into, and
had a meaningful choice regarding the loans at issue.” In fact,
Rise Credit warns borrowers and discloses, not hides, the high
costs of its loans.
      As for Le, the arbitrator found that he was “a serial
borrower, knowledgeable and somewhat sophisticated in his
endeavor to obtain funds for his needs,” and that he “would go
looking” for loans. The arbitrator determined that Le’s
sophisticated borrowing practices, including his prompt
payments and cancellations, sometimes “depriv[ed] the lend[er] of
the full fruits (interest) of their bargain.” Le “understood that
these were expensive loans, and he understood the interest rates
and attendant consequences. He knew how to rescind and have
use of the funds for the longest time possible without cost, before
returning them.”
      “[S]ignificantly,” the arbitrator found, Le “has no debt
now,” and there was “no showing he used one loan to pay off
another nor did he stack them.” Rather, “[t]hroughout his
relationship with [Rise Credit], he controlled his borrowing.”
      Regarding Le’s claim that he had not seen the “slider”
showing the ways he could customize the terms of his loans, the
arbitrator expressly found him not credible.
      The arbitrator then found that the interest rates in Rise
Credit’s loans to Le were not unconscionable by applying the
factors set out in De La Torre v. CashCall, Inc. (2018) 5 Cal.5th

                                6
966 (De La Torre), “the leading case on the issue,” to the
particular facts here.
       First, the arbitrator found that the circumstances of Le’s
transactions evinced no significant degree of procedural
unconscionability. There was “no oppression,” as Le “is a well-
educated person who speaks, understands, works in and [was]
educated in English,” and he testified that “based on his math
training, he understands interest rates and understood those on
his loans.” There also was “no duress” or “sharp practices,”
emphasizing that Le “was never pressured by Rise [Credit] and
could take [his] time to decide if the first or any of the 17 loans
were right for him.” And, “there was no surprise as to any term,”
all of which were “prominently displayed.” Thus, Le “was well
aware of the loan terms, and he kept coming back knowing them
as well.”
       Second, the arbitrator found that Le failed to meet his
burden of demonstrating that the interest rates for his 17 loans
were substantively unconscionable. Le’s arguments, the
arbitrator explained, “ultimately fail[ed] to speak to the
particulars of this borrower and his circumstances.” While the
arbitrator acknowledged that Rise Credit’s interest rates had
been high, she found that Le “presented no evidence that his
credit profile was one that would justify lower rates.” Nor had Le
presented any “evidence regarding a conscionable rate based on
[his] credit risk and [Rise Credit]’s costs,” or any evidence that
the lender’s rates were somehow greater than those prevailing in
the relevant market. The arbitrator further found that Le “got
value for his 17 loans and paid them back so soon his interest
payments and the costs of the loan to him were no[where] near

                                 7
what they would have been if taken to term.” Accordingly, “[a]t
all relevant times, he had control over his financial well-being.”
II. Le’s petition to vacate the arbitration award
       On November 29, 2021, Le filed a petition to vacate the
arbitration award. He argued the trial court should vacate the
award because the arbitrator exceeded “her authority, and the
award cannot be fairly corrected.”
III. Trial court order denying Le’s petition
       After full briefing and oral argument, the trial court denied
Le’s petition and confirmed the arbitration award. The trial
court began by explaining that, given the judicial review
provision of the parties’ arbitration agreement, its task was to
“determine whether the arbitrator followed the correct
unconscionability analysis, and whether the analysis was
supported by the evidentiary record.” The trial court concluded
that Le had “fail[ed] to demonstrate that the mixed findings of
fact and law were without substantial evidence or authority.”
       With respect to procedural unconscionability, the trial court
determined that Le had not made any arguments that the
arbitrator’s findings on oppression, surprise, sharp practices,
duress, or bargaining power were unsupported by the record.
Citing De La Torre, supra, 5 Cal.5th at page 983 and Torrecillas
v. Fitness Internat., LLC (2020) 52 Cal.App.5th 485, 493
(Torrecillas), it rejected Le’s argument that the adhesive nature
of the loan contracts was, by itself, sufficient to establish
procedural unconscionability, explaining that “adhesion alone
does not automatically render a contract procedurally
unconscionable.” “At worst,” the “[a]rbitrator should have found
a minimal to low degree of unconscionability.”

                                 8
       With respect to substantive unconscionability, the trial
court rejected Le’s argument that the “evidence demonstrates
that the interest rate is excessive, apparently as a matter of law.”
Under De La Torre, supra, 5 Cal.5th at page 984,
unconscionability analysis must be based on “‘the circumstances
of the case, taking into account the bargaining process and
prevailing market conditions.’” And, the arbitrator had properly
considered evidence of the parties’ bargaining process and the
available rates in the market.
       Ultimately, the trial court concluded that Le had “point[ed]
to no evidence that would establish that, as a matter of law, the
200% interest rates were unreasonably favorable” to Rise Credit.
IV. Appeal
       Le’s timely appeal from the trial court’s order ensued.
                           DISCUSSION
I. Standard of review
       As the parties agree, “[o]n appeal from an order confirming
an arbitration award, we review the trial court’s order (not the
arbitration award) under a de novo standard.” (Lindenstadt v.
Staff Builders, Inc. (1997) 55 Cal.App.4th 882, 892, fn. 7.)
II. The trial court applied the correct standard of review
       Throughout his briefs, Le argues that the trial court erred
by limiting “its review only to the grounds enumerated in [Code
of Civil Procedure] § 1286.2 and therefore engaged in an overly
and improperly deferential review of the Arbitrator’s Award.” We
disagree.
       In general, “only limited judicial review” of an arbitration
award “is available.” (Jordan v. Department of Motor Vehicles
(2002) 100 Cal.App.4th 431, 443.) Here, the arbitration
agreement delineates the precise scope of that limited judicial

                                 9
review: the parties agreed that they have “the right to judicial
review of (a) whether the findings of fact rendered by the
arbitrator are supported by substantial evidence and (b) whether
the conclusions of law are erroneous under the substantive law of
California and applicable federal law.” The trial court here
correctly applied these standards of review.
       Urging us to reverse, Le raises four objections. We reject
each in turn.
       First, the trial court did not, as Le claims, disregard the
parties’ agreement on the scope of judicial review of an
arbitration award. To the contrary, while the trial court began
by describing the general principles applicable to such review
absent any agreement, it expressly noted and adhered to the
terms of the parties’ arbitration agreement.
       Second, Le misunderstands “substantial evidence” review.
Le insists that the trial court erroneously saw its role as
“affirming and validating the findings of the Arbitrator,” citing a
number of passages in which the trial court determined that the
evidence was sufficient to support the arbitrator’s findings. But
that, of course, is precisely what “substantial evidence” review
requires: factual findings must be affirmed as long as the
evidence is sufficient to support them, regardless of whether
another factfinder might have reached a different conclusion.
(Bowers v. Barnards (1984) 150 Cal.App.3d 870, 873–874.) And
even if, as Le insists, the “Arbitrator’s resolution of a legal
question is entitled to literally no weight”, Le ignores the fact
that “while unconscionability is ultimately a question of law,
numerous factual inquiries bear upon that question,” and the
arbitrator’s factual findings are entitled to deference. (A & M
Produce Co. v. FMC Corp. (1982) 135 Cal.App.3d 473, 489.)

                                10
       Third, to the extent Le argues for de novo review of the
arbitrator’s factual determinations, that argument is both
forfeited and meritless. Le never argued for independent review
below; to the contrary, he appeared to acknowledge his need to
show that the arbitrator “failed to make decisions supported by
substantial evidence.” Thus, Le has thus forfeited the argument
on appeal. (See Mendoza v. Trans Valley Transport (2022)
75 Cal.App.5th 748, 769 [“‘Appellate courts are loath to reverse a
judgment on grounds that the opposing party did not have an
opportunity to argue and the trial court did not have an
opportunity to consider’”].)
       In any event, even if preserved, the argument lacks merit.
The controlling contractual language expressly provides for
judicial review of “whether the findings of fact rendered by the
arbitrator are supported by substantial evidence”—not, as Le
now appears to insist, an independent judicial determination of
the facts.
       Finally, even if the trial court had somehow misunderstood
the standard of review, that error would be harmless. As
discussed below, the record amply supports the arbitrator’s
award. Thus, the trial court reached the correct result. (Prickett
v. Bonnier Corp. (2020) 55 Cal.App.5th 891, 897 [affirming where
“any error . . . resulted in the correct result, making it ineluctably
harmless”].)
III. The trial court properly denied Le’s petition to vacate the
arbitration award
       A. Relevant law
       In De La Torre, supra, 5 Cal.5th at page 976, our Supreme
Court reaffirmed that “[a]s with any other price term in an
agreement governed by California law, an interest rate may be

                                 11
deemed unconscionable.” (Ibid.) But the mere fact that an
interest rate is high does not demonstrate that it is
unconscionable—after all, “[u]nsecured loans made to high-risk
borrowers often justify high rates.” (Id. at p. 973.) Instead, “a
court declares unconscionable only those interest rates that—in
light of the totality of a transaction’s bargaining context—are so
‘unreasonably and unexpectedly harsh’ as to be ‘unduly
oppressive’ or ‘shock the conscience.’” (Ibid.) In other words,
“[s]ome measure of both procedural and substantive
unconscionability must be present—although given the sliding-
scale nature of the doctrine, more of one kind mitigates how
much of the other kind is needed.” (Id. at p. 982.)
       Procedural unconscionability consists of “oppression or
surprise.” (De La Torre, supra, 5 Cal.5th at p. 982.) “The court
[or as here, the arbitrator] must consider whether there was
(1) undue oppression arising from ‘an inequality of bargaining
power,’ including the various factors tending to show relative
bargaining power such as the parties’ sophistication, their
cognitive limitations, and the availability of alternatives; and
(2) surprise owing to, for example, the ‘terms of the bargain
[being] hidden in a prolix printed form’ or pressure to hurry and
sign.” (Id. at p. 983.) “In short, a determination of procedural
unconscionability may well be ‘highly dependent on context.’”
(Ibid.)
       Substantive unconscionability is likewise context-
dependent. (De La Torre, supra, 5 Cal.5th at p. 983.) “[I]t is not
sufficient for a court to consider only whether ‘the price exceeds
cost or fair value’”; the court must also consider, among other
things, “‘the basis and justification for the price.’” (Ibid.) “If, for
example, the interest rate is high because the borrowers of the

                                   12
loan are credit-impaired or default-prone, then this is a
justification that tends to push away from a finding of
substantive unconscionability.” (Ibid.) So too does evidence that
“the price was set by a ‘freely competitive market.’” (Id. at
p. 984.)
       Importantly, De La Torre, supra, 5 Cal.5th at page 993
admonished that “courts must proceed with caution in this area,”
observing that “few courts have ever declared contracts
unconscionable,” especially “where the unconscionable term
alleged is the interest rate on a loan” (id. at p. 992). Indeed, as
De La Torre emphasized (and as seems to remain true today
given the parties’ failure to identify any additional cases), only a
single California appellate case—Carboni v. Arrospide (1991)
2 Cal.App.4th 76 (Carboni)—appears to have ever found an
interest rate unconscionable. (De La Torre, supra, at p. 992.)
       In Carboni, the agreement in question—for a loan of $4,000
that subsequently ballooned to $99,000—not only provided for a
200 percent interest rate, but it was also secured by a deed of
trust on a residence the borrower owned. (Carboni, supra,
2 Cal.App.4th at p. 79.) In that case, the record established the
requisite “oppression” to support a finding of procedural
unconscionability: the borrower was under “emotional distress”
stemming from medical expenses, and he “had unequal
bargaining power because he was unable to obtain a loan from
other sources.” (Id. at pp. 85–86.) The resulting 200 percent
interest rate “was approximately 10 times the rate then
prevailing in the credit market for similar loans,” thus making it
“substantively unconscionable.” (Id. at p. 84.)

                                 13
       B. Substantial evidence supports the arbitrator’s
determination that Le did not demonstrate unconscionability
              1. Procedural unconscionability
       Substantial evidence supports the finding that oppression
and surprise were absent here.
       First, Le did not prove oppression. Le is a well-educated,
sophisticated consumer who had, and availed himself of,
numerous market alternatives. (De La Torre, supra, 5 Cal.5th at
p. 983 [highlighting factors “such as the parties’ sophistication,
their cognitive limitations, and the availability of alternatives”].)
Le has a master’s degree and advanced math training, which
allowed him to understand the interest rates on his loans. His
own loan history demonstrates his sophistication with Rise
Credit’s loan products: he used his ability to rescind, set his
payment amount, and prepay without penalty. Le acknowledged
that Rise Credit never pressured him. And Le never testified
that Rise Credit loans caused him harm or that he would have
preferred not to have taken them; indeed, he testified he found
them valuable.
       Second, Le did not prove surprise. In fact, in this appeal,
he now concedes as much. That concession is warranted given
the facts that the interest rate terms were prominently disclosed,
Le testified he was aware of them, and the arbitrator found no
evidence of any sharp practices.
       Urging us to reverse, Le asserts that his contracts with
Rise Credit were adhesive and presented on a take-it-or-leave it
basis. But the mere fact that a contract is adhesive does not
necessarily suffice to prove procedural unconscionability.
“Whether the agreement was or was not a contract of adhesion is
not the core question. Rather, from the standpoint of

                                 14
determining whether there was procedural unconscionability, the
core issues are surprise and oppression.” (Torrecillas, supra,
52 Cal.App.5th at p. 493.) While the “[u]nconscionability analysis
begins with an inquiry into whether the contract is one of
adhesion” (Armendariz v. Foundation Health Psychcare Services,
Inc. (2000) 24 Cal.4th 83, 113, abrogated in part on another
ground in AT&T Mobility LLC v. Conception (2011) 563 U.S. 333,
340), “[t]he pertinent question . . . is whether circumstances of
the contract’s formation created such oppression or surprise that
closer scrutiny of its overall fairness is required” (OTO, L.L.C. v.
Kho (2019) 8 Cal.5th 111, 126). Otherwise, “every form contract
not subject to negotiation between the parties would be deemed
oppressive, totally disregarding the undisputed ability of a
contracting party to choose to obtain that for which he bargained
from other sources.” (Dean Witter Reynolds, Inc. v. Superior
Court (1989) 211 Cal.App.3d 758, 769.)
       Thus, whether an adhesive contract demonstrates
oppression depends on the circumstances. Those circumstances
do not exist here. The challenged interest rates were not buried
in a form contract that Le was unlikely to read. (Gatton v. T-
Mobile USA, Inc. (2007) 152 Cal.App.4th 571, 582 [“Appellate
courts considering unconscionability challenges in consumer
cases have routinely found the procedural element satisfied
where the agreement containing the challenged provision was a
contract of adhesion”].) After all, the purportedly unconscionable
term was the central focus of the parties’ bargain—namely, the
price.2 (See De La Torre, supra, 5 Cal.5th at pp. 982–983

2
     Even if the mere fact that these contracts were adhesive
was enough to establish some minimal degree of procedural

                                15
[making no mention of this factor in describing factors governing
unconscionability challenges to interest rates].)
       Moreover, Le’s repeated attacks on the arbitrator’s finding
that Le had the option to “‘walk away’” from Rise Credit’s offers
are misguided. While Le may be correct that a party can
theoretically walk away from any adhesive contract, the ability to
do so may undermine a finding of “oppression,” particularly
under circumstances such as those presented here. (De La Torre,
supra, 5 Cal.5th at p. 983.) As the arbitrator correctly noted, Le
“clearly had other sources from which he could borrow.” While Le
now insists that he was in “severe financial straits”, he points to
no evidence that would have compelled the arbitrator to find that
he faced anything like the sort of oppression confronted by the
borrower in Carboni, supra, 2 Cal.App.4th at page 86.
       Le’s contention that the circumstances of his bargain were
“oppressive” due to his own lack of sophistication is similarly
meritless. Again, as the arbitrator found, Le is a “well-educated”
engineer, and he admitted that he “understands interest rates
and understood those on his loans.” In fact, Le understood Rise
Credit’s loans well enough to take advantage of their cancellation
and prepayment terms and avoid making substantial interest
payments.
       Furthermore, the arbitrator did not err in emphasizing the
fact that Rise Credit did not exert any pressure on him to execute
the loan documents. Certainly, oppression may exist when a

unconscionability, Le’s claims would still fail. As the trial court
recognized, Le failed to establish the high degree of substantive
unconscionability that would be required to set aside the award
given a “minimal to low degree” of procedural unconscionability
stemming from the contracts being adhesive.

                                 16
lender takes advantage of its position as the sole option for a
party under pressure from external circumstances. (See, e.g.,
Carboni, supra, 2 Cal.App.4th at p. 86.) The fact that Rise Credit
imposed no “pressure to hurry and sign” (De La Torre, supra,
5 Cal.5th at p. 983)—and indeed, even allowed Le to cancel his
loans penalty free days after he had signed, as Le did on multiple
occasions—further supports the arbitrator’s conclusion that Le
failed to prove procedural unconscionability.
       Le’s attacks on the integrity of the “‘bargaining process’”
likewise fail. Le appears to criticize Rise Credit for not providing
an amortization schedule, but he did not testify that he wanted
any such schedule, much less that it would have affected his
choice to borrow. This failure is especially pronounced
considering the loan agreement discloses a detailed payment
schedule. Le also argues that Rise Credit should have disclosed
“that borrowing just a few dollars less would have saved
[borrowers] thousands in additional interest as the rates would
have then been capped at 30% instead of 200%.” Yet Le points to
no evidence that Rise Credit or anyone else would have provided
him such a loan given his credit history. Nor did Le testify that
he would have preferred a smaller loan amount. Similarly, Le
complains that Rise Credit advertised its loans to those who
might seek them—e.g., high-risk borrowers. But he fails to
explain how these mailers affected his particular transactions
with Rise Credit (or address his testimony that he did not need a
mailer to find or apply for a loan).
       Finally, Le attempts to raise an evidentiary “dispute”
regarding Rise Credit’s demonstrative exhibit (the slider), which
showed the process of applying for a loan on the lender’s Web site
at the time Le applied for his loan. Apparently hoping to set

                                 17
aside the arbitrator’s refusal to credit Le’s testimony that he had
not seen the slider that allowed him to control aspects of his loan
like the duration and loan amount, Le contends he was the “sole
witness with personal knowledge” of what Rise Credit’s
application procedures were when he applied for his loans. That
is untrue: a Rise Credit witness explained that the
demonstrative exhibit reflected precisely what Le saw when he
applied and that he was required to choose the duration and loan
amount before submitting the loan applications. Regardless,
even if Le somehow had not seen the slider, it would not matter,
as he still failed to prove any meaningful oppression.
              2. Substantive unconscionability
       Because Le demonstrated no procedural unconscionability,
his claims necessarily fail. Our analysis could stop here. For the
sake of completeness, we address, and reject, Le’s argument that
his contracts with Rise Credit were substantively unconscionable.
       As Le now “concedes,” “the rates [were] set in a competitive
marketplace.” That alone diminishes any inference that the loan
terms were unduly harsh. (De La Torre, supra, 5 Cal.5th at
p. 984; cf. Carboni, supra, 2 Cal.App.4th at p. 84 [emphasizing
that the challenged rate was 10 times that prevailing marketwide
for similar loans].)
       Rise Credit’s rates also reflected the costs and risks that it
incurred when it loaned to borrowers such as Le. As the
arbitrator found, Le “presented no evidence that his credit profile
was one that would justify lower rates.” He had a heavy debt
load and paid similar rates on other loans, and “[t]here is no
wonder he was labeled a credit risk by [Rise Credit’s] algorithm.”
       And, unlike the fully secured loan in Carboni, supra,
2 Cal.App.4th at page 84, Rise Credit’s loans to nonprime

                                 18
borrowers like Le were unsecured and carried a substantial of
risk default. (De La Torre, supra, 5 Cal.5th at p. 983 [where
“borrowers of the loan are credit-impaired or default-prone, then
this is a justification that tends to push away from a finding of
substantive unconscionability”].) The interest rates reflect the
results of a complex underwriting process that took millions of
dollars, scores of data analysts, and years to develop. In addition
to these underwriting costs, the interest rates also reflected Rise
Credit’s other costs.
       What is more, as the arbitrator found, Le “got value for his
17 loans.” Le admitted as much. And because Le understood the
terms of his loans, he controlled their costs, paying only a “small
portion” of the overall debt he incurred in interest (approximately
13%). Especially in these circumstances, the arbitrator had
ample basis to find that Rise Credit’s interest rates were not
“‘overly harsh’” or “‘so one-sided as to shock the conscience.’”
(De La Torre, supra, 5 Cal.5th at p. 982.)
       Invoking Financial Code section 22304.5, Le insists that
while it does not apply to his loans, the 36 percent rate cap the
Legislature subsequently imposed necessarily demonstrates that
the interest rates on his loans were unconscionable. But as
De La Torre made clear, “whether an interest rate is
unconscionable is fundamentally a different inquiry than
whether the rate exceeds a numerical cap.” (De La Torre, supra,
5 Cal.5th at p. 976.) In other words, the Legislature’s decision to
impose a “bright-line rule policing a single facet of loan
agreement” (ibid.) does not demonstrate, as Le suggests, that
Rise Credit’s interest rates in its loans to Le were unconscionable
as a matter of law.

                                19
       Le likewise cannot prevail here by contending that the
price of Rise Credit’s loans so far exceeded the lender’s costs as to
render them unconscionable. Le focuses exclusively on Rise
Credit’s “cost of borrowing,” which he asserts ranged “from 10–
13%.” He cites testimony that the interest rate at which Rise
Credit borrowed from other lenders in 2019 was “around
13 percent.” Yet Le ignores the fact that Rise Credit’s cost of
borrowing was only one of its costs. (De La Torre, supra,
5 Cal.5th at p. 983.)
       Nor can Le convert one of these costs—the high risk of
default—into an argument that Rise Credit’s interest rates
reflecting that default risk are unconscionable. Again, as
De La Torre recognized, where “the interest rate is high because
the borrowers of the loan are credit-impaired or default-prone,
then this is a justification that tends to push away from a finding
of substantive unconscionability.” (De La Torre, supra, 5 Cal.5th
at p. 983.)
       Moreover, Le’s contention that it is “undisputed that these
loans are built to fail” is belied by the record. That 30 percent of
borrowers end up defaulting does not mean that Rise Credit aims
for or desires a 30 percent default rate.
       Similarly, Le is wrong to insist that the fact that Rise
Credit purportedly “steered” borrowers to non-rate-capped loans
above $2,500 “cuts dispositively against any argument that the
interest rate is a product of the riskiness” of borrowers like Le.
Le points to nothing in the record that Rise Credit could or did
profitably offer loans below $2,500 at a capped interest rate, or
that contradicts the lender’s evidence establishing that interest
rates on the loans it did offer reflect the risk of these loans.

                                 20
       Furthermore, Le cannot demonstrate that he was entitled
to lower rates because he was “a particularly diligent borrower”
who repaid his loans. Again, Le fails to direct us to any evidence
in the record demonstrating that the weight given to payment
history in Rise Credit’s underwriting model was improper, that
the arbitrator was wrong to find that there was “no wonder” that
Le was labeled a credit risk, or that otherwise compelled a
finding that the rates charged Le based on his actual credit
history were “so ‘unreasonably and unexpectedly harsh’ as to be
‘unduly oppressive’ or ‘shock the conscience.’” (De La Torre,
supra, 5 Cal.5th at p. 973.)
       The many nonbinding, out-of-jurisdiction cases3 that Le
relies upon do not compel a different conclusion. Aside from
being factually distinguishable, Le offers us no reason to
disregard our own Supreme Court. (Auto Equity Sales, Inc. v.
Superior Court (1962) 57 Cal.2d 450, 455.)
       Finally, Le’s reliance upon a trial court’s proposed
statement of decision in a still-pending case involving a different
plaintiff, a different lender, and different loan products,
De La Torre v. CashCall, Inc., No. 19CIV01235 (San Mateo
Super. Ct. Nov. 17, 2022) is misplaced. Aside from the fact that
that case has zero precedential value, it utterly lacks persuasive

3
      James v. National Financial, LLC (Del.Ch. 2016) 132 A.3d
799, 837; State ex rel. King v. B&B Investment Group, Inc. (N.M.
2014) 329 P.3d 658, 662, 667; Daye v. Community Financial Loan
Service Centers, LLC (D.N.M. 2017) 280 F.Supp.3d 1222, 1253–
1255; Capital Loan Corp. v. Platero (Navajo Dt. Ct., Jan. 25,
2000, No. 2000 CP-CV-001); Drogorub v. Payday Loan Store of
WI, Inc. (Wis.Ct.App. 2012, Dec. 18, 2012, No. 2012AP151) 2012
WL 6571696, at p. *4.

                                21
value. That a court found different loan products to different
plaintiffs made by a different lender both procedurally and
substantively unconscionable sheds no light on whether Rise
Credit’s loans to Le were unconscionable.
                          DISPOSITION
      The order is affirmed. Elevate and Rise Credit are entitled
to costs on appeal.
      NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.

                               _____________________, Acting P. J.
                               ASHMANN-GERST
We concur:

________________________, J.
CHAVEZ

________________________, J.
HOFFSTADT

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