Discover Bank v. Superior Court

In Discover Bank v. Superior Court (2005) 36 Cal.4th 148, the trial court determined that a class arbitration waiver in a consumer credit cardholder agreement was unconscionable and that the provision was severable, and struck it from the arbitration agreement. (Discover Bank, supra, 36 Cal.4th at p. 155.) The Court of Appeal held that any California rule prohibiting class arbitration waivers was prohibited by the FAA and issued an extraordinary writ directing the trial court to issue an order enforcing the arbitration agreement as written. (36 Cal.4th at p. 155.) The California Supreme Court held that the class arbitration waiver was unconscionable under general contract law principles and that the FAA did not preempt California law on this issue. (36 Cal.4th at pp. 162?163, 165-166.) Discover Bank therefore reversed the judgment by the Court of Appeal (id. at p. 174), and did not address the question of severability.