KBK Appellate Victory in Mejia v. DACM, Inc.

On August 24, 2020, the 4th Appellate District, Division Three affirmed the Superior Court’s order denying Defendant’s Motion to Compel Arbitration.

The underlying case involves a motorcycle dealership failing to comply with California’s Rees-Levering Act by selling motorcycles without providing a single document with all sales terms. Instead, the dealership partners with lenders to issue credit cards to consumers. KBK brought a class action against the dealership, Del Amo, and also are seeking a separate, prospective public injunction on behalf of California consumers.

The Court of Appeal affirmed the Superior Court’s denial of Del Amo’s Motion to Compel Arbitration. The Court clarified the scope of public injunctive relief under McGill v. Citibank. The Court held that California has a fundamental interest in preserving its consumers’ right to seek public injunctive relief (thereby disposing of Del Amo’s Utah choice of law argument), Mejia clearly prayed for prospective public injunctive relief (distinguishing cases seeking private injunctive relief), and that the arbitration provision bars public injunctive relief in every forum.

The full text of the decision can be found here.