Kilgore v. KeyBank: Ninth Circuit Holds Unconscionability Analysis Not Preempted by Concepcion

The Ninth Circuit recently held that the analysis of an arbitration clause’s enforceability is to be governed by established unconscionability doctrines, which are not preempted by the U.S. Supreme Court’s decision in Concepcion v. AT&T Mobility.  See Kilgore v. KeyBank, No. 3:08-cv-02958 (9th Cir. Mar. 7, 2012) (available here).

In a clear and direct statement, the panel held that

Concepcion did not overthrow the common law contract defense of unconscionability whenever an arbitration clause is involved.  Rather, the Court reaffirmed that the savings clause preserves generally applicable contract defenses such as unconscionability, so long as those doctrines are not “applied in a fashion that disfavors arbitration.”

Slip op. at 2654 (citing Concepcion v. AT&T Mobility, 131 S. Ct. 1740, 1747 (2011)).