California Supreme Court Faces Test Over Corporate Contract Traps

The legal challenge centers on Kenneth W. Lathrop, et al. v. Thor Motor Coach, a case where a motor home manufacturer attempted to force litigation into Indiana, effectively bypassing the Song-Beverly Consumer Warranty Act and the Consumers Legal Remedies Act. While Thor later offered a limited concession to honor certain California statutes during the Indiana proceedings, the plaintiffs refused to sign the stipulation, arguing that companies should not be permitted to use unlawful fine print as a default strategy.

William Pletcher, Litigation Director for Consumer Watchdog, notes that these tactics create a risk-free environment for companies. If a consumer accepts the contract at face value, they often lose access to protections that the California Legislature has explicitly declared unwaivable. The amicus brief argues that a company must prove that a consumer’s rights remain fully effective before shifting a case to another jurisdiction. If the Supreme Court sides with the advocates, the ruling could reshape how businesses draft consumer agreements for everything from household electronics to vehicles, ensuring that California’s consumer safeguards remain functional rather than theoretical.