CARFAX Should Publicize This One

Result of a serious automobile accident.Image via Wikipedia

CARFAX, a company that provides vehicle histories for automobiles (largely to used car buyers before the purchase) already runs some pretty clever ads on TV, so they don’t need any advice from me. But they might want to publicize this:

Does the Motor Vehicle Information and Cost Savings Act (“the Odometer Act” or “the Act”), 49 U.S.C. §§ 32701-32711, and its implementing regulations, 49 C.F.R. pt. 580, allow a private right of action where the fraud relates to something other than the vehicle’s mileage—in this case, its accident history?

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[W]e conclude that the private right of action under the Odometer Act is limited to allegations of fraud relating to a vehicle’s mileage.

The case is Bodine v. Graco, Inc., case no. 06-16271 (9th Cir. July 24, 2008).

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One for the Little Guy . . . So Far

Professor Martin at California Appellate Report notes an interesting angle that I missed in Holcomb v. Wells Fargo Bank, N.A., case no. G037638 (4th Dist. Sept. 20, 2007): Holcomb is a pro se appellant who prevails against a corporate giant on the appeal.

Mr. Holcomb succeeds in partially reversing the trial court’s order sustaining Wells Fargo’s demurrer. There’s still a long road ahead for his case, of course. Time to look for a lawyer, I think.

Great Lawyers Can Write Unenforceable Arbitration Agreements

I’m beginning to wonder if writing the perfect arbitration provision is something like understanding the rule against perpetuities. You all remember that case from torts class, don’t you? The court holds that an attorney can’t be liable for malpractice related to the rule against perpetuities because no one understands the rule against perpetuities. Hence, the attorney could not have violated the standard of care.

A little over a month ago, the Ninth Circuit ruled in Davis v. O’Melveny & Myers, case no. 04-56039 (9th Cir. May 14, 2007) that the arbitration provision in the employment contract of a prominent, powerful L.A.-based law firm was unenforceable. Not just unenforceable, but “shock the conscience” unenforceable. The case was blogged about at Workplace Prof Blog, the Adjunct Law Prof Blog, and Settle it Now Negotiation Blog, among many others.

Just as you’re asking yourself, “If a high-powered law firm can’t draft an enforceable arbitration provision for its own contracts, then who can?” comes Gatton v. T-Mobile USA, Inc., case no. A112082 (June 22, 2007), in which the arbitration provision in T-Mobile’s customer agreement gets similar treatment in California state court. The First District Court of Appeal holds that T-Mobile’s arbitration provision in its customer agreements is unenforceable because of the minimal degree of procedural unconscionability arising from its adhesive nature and the “high degree of unconscionability arising from the class action waiver.”

I’m going to go out on a limb and say that T-Mobile probably had pretty good lawyers draft its agreement, and that the lawyers who drafted the provision for O’Melveny were no slouches, either. Who will fall next?