Discover Bank Wins Bid to Arbitrate DACA Loan Application Suit

Discover Bank won its bid to arbitrate a lawsuit over its handling of DACA participants’ loan applications, after the U.S. District Court for the Northern District of California rejected arguments that the terms of the arbitration agreements were unconscionable.

The plaintiffs argued that California’s McGill rule, which prohibits enforcement of arbitration agreements that waive the right to pursue public injunctive relief, required the court to invalidate the agreement. But according to Judge Susan Illston, the plaintiffs aren’t seeking public relief.

Because the lawsuit seeks relief on behalf of a class of people who applied for, or tried to apply for, ...