Concepcion

In two opinions filed on March 6, 2012, the Missouri Supreme Court applied recent U.S. Supreme Court arbitration precedent to cases involving binding arbitration agreements. In yesterday’s post I discussed Brewer v. Missouri Title Loans, in which the Missouri Supreme Court held that a binding arbitration agreement was unenforceable due to unconscionability. Today I’ll discuss Robinson v. Title Lenders, Inc. d/b/a/ Missouri Payday Loans, in which the Missouri Supreme Court reversed the lower court’s determination that an arbitration agreement was unenforceable due unconscionability.

Background of Robinson v. Title Lenders, Inc.

The petitioner had borrowed money from Title Lenders, Inc. on 13 occasions, signing a loan agreement each time that contained a binding arbitration provision precluding class arbitration. She brought suit in October 2006 alleging, among other things, violations of the Missouri Merchandising Practices Act and seeking relief for herself as well as a putative class of borrowers. The lender moved to stay the action and to compel the borrower to pursue her claims through either arbitration or small claims court. In March 2009 the trial court stayed the court proceedings and ordered arbitration, but struck the class action waiver, finding it to be unconscionable. [click to continue…]

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In two opinions filed on March 6, 2012, the Missouri Supreme Court applied recent U.S. Supreme Court arbitration precedent to cases involving binding arbitration agreements. In tomorrow’s post, I’ll discuss the court’s application of Stolt-Nielsen, S.A. v. AnimalFeeds International Corp. and AT&T Mobility LLC v. Concepcion to reverse a lower court’s judgment that refused to enforce an arbitration agreement due to unconscionability. But in today’s post, I’ll discuss Brewer v. Missouri Title Loans, in which the Missouri Supreme Court held that a binding arbitration agreement was unenforceable due to unconscionability.

Background of Brewer v. Missouri Title Loans

Petitioner Beverly Brewer borrowed $2,215 from Missouri Title Loans via a loan that had an annual percentage rate of 300% and that was secured by her automobile. The loan agreement contained a binding arbitration provision that required her to arbitrate claims and prohibited class arbitration, while the lender specifically retained its right to utilize the courts in order to repossess the vehicle. The agreement also provided that the parties would each be responsible for their own expenses, including fees for attorneys, experts, and witnesses.

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