Appeals Court Holds That Predispute Class Action Lawsuit Waiver In Payday Loan Class Action Lawsuit Against Cottonwood Financial d/b/a The Cash Store Corporation Unconscionable
A Wisconsin appeals court has held in a class action lawsuit against payday lender Cottonwood Financial d/b/a The Cash Store Corporation (styled Darcie Estes v. Cottonwood Financial d/b/a The Cash Store Corporation, Case No. 2009AP760) that a consumer contract that prohibits consumers from filing class action lawsuits against a payday lender is substantively unconscionable, according to a class action lawsuit news report.
Cottonwood Financial d/b/a The Cash Store Corporation reportedly moved to compel arbitration in the payday loan class action lawsuit in order to avoid litigating in court. The circuit court granted The Cash Store’s motion to compel arbitration, over objection of plaintiff that the arbitration clause was unconscionable.
The appeals court reversed the trial court, reportedly relying on Wis. Stat. section 421.110(1) of the Wisconsin Consumer Act, which expressly allows consumers to “bring a civil action on behalf of himself or herself and all persons similarly situated.” The court reportedly found that permitting predispute waivers of class action lawsuit proceedings would be contrary to the Act’s purpose of protecting consumers from unfair practices.
For more information on the Cottonwood Financial d/b/a The Cash Store payday loan class action lawsuit, read the payday loan class action lawsuit appeal opinion.
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