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Nissan Store Successful in Arbitration Bid

Thursday, January, 7, 2016

The California Court of Appeal recently turned down a consumer car buyer’s class action proposal against a Nissan store located in Sunnyvale. The buyer’s efforts were an attempt to circumvent the company’s arbitration clause, which will now apply. The decision was made by a three person panel, all of whom rejected the customer’s arguments that Nissan’s policy was “unconscionable and unenforceable.”


The dispute began in 2007 when the customer purchased a 2007 vehicle for her son. As part of the purchase, she signed a retail installment sales contract for financing. Her credit union then offered her a lower APR, which prompted her to attempt to negotiate her loan with the dealer for a lower rate. She was extended a comparable offer and again signed a retail installment sales contract. Like the first, it contained a standard arbitration provision stating she waived her right to arbitrate a dispute as a representative or member of a class.


She later brought a lawsuit against the dealership and a third-party lender claiming they had violated California’s consumer protection and vehicle finance laws, as well as laws related to unfair competition. She claims the store backdated the sales agreement, creating an undisclosed finance charge, and that the dealership charged her a new tire fee, collected a filing fee without asking, misrepresented the extended warranty, and failed to provide mandatory disclosure of her credit score.


The customer sought class action for those with similar contracts, an effort that was rejected by a Santa Clara Superior Court judge. The two sides will now determine whether or not to proceed to arbitration to settle the remaining issues.