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On February 19, 2021, the Ninth Circuit upheld a district court’s grant of a motion to compel arbitration in a putative class action lawsuit alleging violations of various California consumer protection statutes. The court rejected the Plaintiff’s argument that the Agreement was invalid under California law because its class action waiver prohibited her from seeking injunctive relief.
Defendant MoneyLion provides financial services to its customers, one of which is the “MoneyLion Plus program.” That program offers customers with little or poor credit history a small “credit-builder” loan to help create a positive credit history. Plaintiff Marggieh DiCarlo enrolled in the Plus program and took out a credit-builder loan. As part of her enrollment, she signed a Membership Agreement (the “Agreement”) that required her to pay monthly fees and gave each party the right to demand arbitration in the event of a dis
The panel: Judges Bea, Thapar (CA6), and Collins, with Judge Thapar writing the opinion.
Key highlight: “If any doubt remains, consider this. Only an interpretation that public injunctive relief remains available will render the arbitration provision ‘lawful’ and ‘capable of being carried into effect.’ Cal. Civ. Code § 1643. And only this interpretation facilitates arbitration.
Mitsubishi, 473 U.S. at 626. So both California law and the FAA tell us what to do next construe the Agreement to abide by
McGill and allow arbitration.”
Background: Plaintiff Marggieh DiCarlo took out a $500 loan through MoneyLion Plus, a program designed to help individuals build a positive credit history. She signed an agreement providing for the arbitration of any disputes. That provision expressly prohibited a plaintiff from “acting as a private attorney general,” but also authorized the arbitrator to “award all injunctive remedies available in an individual lawsuit.”�