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Ban on Consumer Contracts Appealed

By: AP
By: AP

A Florida pay day loan company contends a U.S. Supreme Court decision supports a ban on class action lawsuits in its borrowers' contracts.
The Florida Supreme Court heard arguments Wednesday on whether the 2011 federal ruling means it must overturn a state appellate court's decision in a Palm Beach County case.
The 4th District Court of Appeal invalidated the class action ban in McKenzie Check Advance's loan contracts because borrowers couldn't afford lawyers to sue on an individual basis.
The ban is part of a clause that requires claims against the company to be resolved through arbitration.
The U.S. Supreme Court subsequently struck down a California law that outlawed similar class action bans in consumer contracts. The 5-4 opinion says the law conflicted with a federal law that encourages arbitration.


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