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While Concepcion may not have appeared on the front page of any newspaper, it is an important case because unconscionability is often used by plaintiffs’ lawyers to invalidate forced arbitration clauses. These forced arbitration clauses are usually hidden within adhesion contracts or legal boilerplate to ensure that a business cannot be sued by a class or to shield a business from both jury trials and punitive damages. While these goals make good business sense, they can result in abuses such as wrongfully charging small amounts of money to multiple customers.
For example, imagine a situation where a company wrongfully charges nearly all of its customers an extra thirty dollars. If no forced arbitration agreement existed, these customers would be free to pool their individual claims together within a class-action lawsuit. As a result, this class could attain competent legal counsel to litigate their rights and may be able to ask for punitive damages. In this example, the business would face a potentially large monetary judgment against its interests. This possibility would serve as a disincentive to to charging the fee, or, at least encourage it to stop. Furthermore, the specter of this judgment would likely discourage other businesses from wrongfully charging their customers.
However, imagine the same situation except the business has included a forced arbitration agreement within the legal boilerplate of a contract. In this scenario, a customer will be forced to expend the time, money, and effort to arbitrate or individually litigate a thirty dollar claim. This is the scenario within Concepcion.
