ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Friday, July 4, 2008

Speaking of Unconscionability: New Mexico Supremes Refuse to Enforce Class Action Waiver

FlagAccording to the ABA Journal Online, last week, the New Mexico Supreme Court refused to enforce a class action waiver in consumer contracts with Dell Inc. (The consumers sued Dell alleging misrepresentation about the amount of memory contained in the computers). The New Mexico court held that the class action ban was unconscionable because it "essentially foreclosed" relief in a case where each consumer's damages amount was small.

The ABA Journal notes that, since 2006, the highest courts in Illinois, New Jersey, North Carolina and Washington have found that class action waivers in consumer contracts were unconscionable. Add California to that list, though Discover Bank v. Superior Court is a 2005 decision finding a class arbitration waiver unconscionable. The ABA Journal notes that many federal courts have upheld class action waivers.

I've written some about this in Contracting Out of Process, Contracting Out of Corporate Accountability: An Argument Against Enforcement of Pre-Dispute Limits on Process.

For some reason, I am having trouble locating the New Mexico decision. If you find a link or case cite, please leave it in the comments. Thanks!

[Meredith R. Miller]

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I'm hoping this link will work:

If not, try this website; the link to the opinion is at the bottom:

Posted by: viva moffat | Jul 10, 2008 8:15:19 PM

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