California Court Upholds Delaware Choice of Law Provision Prohibiting Class-Wide Arbitration
Question: Assume that a California resident signs a cardholder agreement with a Delaware bank that includes an arbitration clause prohibiting class-wide arbitration. If the California resident sues the bank in a putative nationwide class action, can the bank enforce the agreement and compel arbitration on an individual basis?
Answer: Yes, according to the Second District Court of Appeal in Discover Bank v. Superior Court, 05 C.D.O.S. 10291 Dec. 7, 2005).
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