California, United States of America
The following excerpt is from Natalini v. Import Motors, Inc., 153 Cal.Rptr.3d 224 (Cal. App. 2013):
Second, the arbitration provision authorizes an appeal resulting in a new arbitration before a three-arbitrator panel if the award includes injunctive relief.5 This type of clause unduly burdens the buyer because the buyer, not the car dealer, is more likely to obtain an injunction. "[I]mmediate injunctive relief [is often] essential to protect consumers against further illegal acts of the defendant." ( People v. Pacific Land Research Co. (1977) 20 Cal.3d 10, 20, 141 Cal.Rptr. 20, 569 P.2d 125.) In litigation by consumers, "the importance of providing an effective injunctive remedy becomes manifest." ( Barquis v. Merchants Collection Assn. (1972) 7 Cal.3d 94, 107, 101 Cal.Rptr. 745, 496 P.2d 817.) Not surprisingly, it is the buyer, not the car dealer, who would be seeking preliminary or permanent injunctive relief, primarily to enforce consumer laws like the CLRA. It is difficult to conceive of a situation where a car dealer would be requesting injunctive relief against a buyer. If an injunction is issued against a dealer, the arbitrator has favorably reviewed the merits of the buyer's claims and determined that the interests of consumers will be irreparably injured without injunctive relief. Nevertheless, here, the arbitration provision allows the car dealer to delay the effect of an injunction by commencing a new arbitration. By authorizing appeals from injunctive relief, only the car dealer is benefited, making the clause one-sided. (See Trompeter,supra, 2012 WL 1980894 [p. *6] ; Smith,supra, 2012 WL 834784 [p. *4].)
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