Consumer Watchdog Joins California Supreme Court Brief Opposing Corporate Contract "Trap" That Strips Consumers of Unwaivable Rights

Brief urges Court to reject after-the-fact promises that protect only consumers sophisticated enough to challenge illegal contract terms

LOS ANGELES, July 29, 2026 /PRNewswire/ -- Consumer Watchdog announced today that it has joined an amicus curiae brief, filed July 27 together with seven other public interest and legal services organizations, urging the California Supreme Court to prevent corporations from using forum-selection and choice-of-law clauses to evade California consumer protections that the Legislature has declared unwaivable.

The brief in Kenneth W. Lathrop, et al. v. Thor Motor Coach, et al., supports consumers challenging provisions in a Thor Motor Coach warranty that directed disputes to Indiana and selected Indiana law. The Court of Appeal, Second Appellate District, Division Seven, refused to enforce those provisions in a published 2024 decision, and Thor sought review in the Supreme Court.

After the consumers challenged those provisions, Thor offered not to oppose the application of two California statutes — the Song-Beverly Consumer Warranty Act and the Consumers Legal Remedies Act — in the Indiana proceeding while continuing to insist that the case be sent there. The consumers objected to the proposed stipulation and never signed it. The brief argues that companies should not be allowed to insert unlawful terms into consumer contracts and then offer to abandon only part of those terms in the rare case where a consumer successfully challenges them.

"Companies should not be allowed to bury illegal terms in a form contract, count on consumers to follow them, and then retreat only when the rare consumer has the resources to fight back," said William Pletcher, Litigation Director for Consumer Watchdog. "A right the Legislature has declared unwaivable must be real for every consumer—not just those savvy enough to disregard the contract, hire California counsel and challenge it in court."

California's Song-Beverly Consumer Warranty Act and Consumers Legal Remedies Act provide important warranty and consumer-protection rights. Both laws declare that any contractual waiver of the rights and remedies they confer is contrary to public policy and void.

The brief argues that Thor's proposed approach would leave behind the consumers most likely to be harmed by unlawful contract terms: those who believe what the contract says. Consumers may file in the designated out-of-state forum without asserting their California rights, or may abandon relatively small claims because litigating across the country appears too difficult or expensive. In this specific case, Indiana's lemon law does not cover motor homes, so a California buyer who follows the contract to Indiana may find no comparable remedy there — and may never learn that California law guaranteed one.

"Thor's proposed rule would turn unlawful contract drafting into a largely risk-free strategy," Pletcher said. "Most consumers will believe the contract or simply give up. The company changes course only when someone catches it—and even then wants to keep the benefit of forcing the case across the country. California law should not reward that kind of trap."

The brief urges the California Supreme Court to hold that:

• A company seeking to send a case outside California bears the burden of showing that the consumer's unwaivable California rights will remain fully effective in the other court.
• A unilateral, after-the-fact promise not to oppose the application of selected California laws does not automatically cure an unlawful contract.
• A court should not sever an unlawful choice-of-law provision simply to preserve a related forum-selection clause that would otherwise be unenforceable.

Although the case involves a motor home, the Court's ruling could affect disputes involving virtually every product bought for personal, family or household use — from rice cookers, vacuum cleaners and mobile phones to motorized wheelchairs and cars. The Consumers Legal Remedies Act also protects consumers in a broad range of transactions involving goods and services.

"This case is about whether California's consumer protections work in practice or exist only on paper," Pletcher said. "When the Legislature says a right cannot be waived, corporations should not be able to accomplish the same result indirectly through fine print and procedural obstacles."

The brief asks the Supreme Court to affirm the decision of the Court of Appeal.

Consumer Watchdog joined the brief with the Katharine & George Alexander Community Law Center, the California Association for Microenterprise Opportunity, Community Legal Services in East Palo Alto, Consumer Federation of California, Housing and Economic Rights Advocates, Public Counsel, and Public Law Center.

The brief was principally written by Hanne L. Jensen and Ezekiel S. Wald of Gibbs Mura LLP, along with Ted Mermin and Joy Donaldson of the UC Berkeley Center for Consumer Law & Economic Justice, who serve as counsel for amici curiae. 

Read the amicus brief here.

About Consumer Watchdog

Consumer Watchdog is a nonpartisan nonprofit organization with four decades of expertise in California consumer protection. Consumer Watchdog advocates for consumers through public-interest litigation, regulatory intervention, legislation and public education.

SOURCE Consumer Watchdog