Opinion
S241434
08-13-2018
De La TORRE (EDUARDO) v. CASHCALL, INC.
Opinion filed
With roots predating the Anglo-American legal tradition, the doctrine of unconscionability has been used to temper the consequences of certain bargains arising in the course of economic life.
The California Legislature is entitled to subject loan transactions, like other contracts, to the unconscionability doctrine's nuanced blend of tractability and protection of human dignity. It did so here.
In doing so, the Legislature chose to retain the flexible standard of unconscionability even as it did away with interest caps on consumer loans of $2,500 or more. By its action, the Legislature recognized to some degree how commerce depends on fairness, and functioning markets on meaningful choices. Although courts must proceed with caution in this area, the possibility that an interest rate is unconscionable in a particular context is not so different relative to any other kind of potential contractual defect that it justifies concluding that courts lack power or responsibility to address unconscionable interest rates. In light of the Legislature's choice, as reflected in the text, context, and history of the relevant statutory provisions and the unconscionability doctrine, we conclude the interest rate on consumer loans of $2,500 or more may render the loans unconscionable under section 22302 of the Financial Code.
Majority Opinion by Cuéllar, J.
-- joined by Cantil-Sakauye, C. J., Chin, Corrigan, Liu, Kruger, and Haller*, JJ.
* Associate Justice of the Court of Appeal, Fourth Appellate District, Division One, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.