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On March 30, 2007, Morgan Lewis gave a training in Burlingame, CA on hot topics in consumer class actions.  The talk began with a definition on consumer class action, and went through arbitration clauses and related waivers.

Waivers may be unenforceable if procedurally or substantively unconscionable.  Procedural unconscionability addresses the process of making a contract.  The factors here are the bargaining power of the parties, conspicuousness of contract language.  Substantive unconscionability focuses on the contract terms.  Recent court cases have held waivers to be unconscionable.  An example is Discover Bank vs. Boehr, 113 P. 3d 1100 (Cal. 2005). 

The training explained that one strategy for dealing with class action waiver uncertainties was to specify the governing law.  To reduce nationwide class certification, the speakers advised inserting governing law provisions in contracts or on a web site that specify that the law of the consumer’s home state govern disputes.