New law ends “infinite arbitration clauses” that deny consumers their day in court

SACRAMENTO, Calif. — Today, Senator Thomas J. Umberg (D–Santa Ana), Chair of the Senate Judiciary Committee, announced that Governor Gavin Newsom has signed Senate Bill 82, legislation to restore fairness and common sense to California’s justice system by ending so-called “infinite arbitration clauses.”

“The Governor’s signature on SB 82 restores fairness and common sense to California’s justice system,” said Senator Umberg. “No one should be denied their day in court because they clicked ‘I agree’ to a streaming trial or grocery app years ago. SB 82 makes sure arbitration applies only to the contracts people actually sign, not to every future dispute corporations can dream up.”

Sponsored by the Consumer Attorneys of California, Consumer Federation of California, and Consumer Watchdog, SB 82 ensures that arbitration agreements between businesses and consumers apply only to the specific product or service covered by the contract at the time of signing. The measure eliminates overly broad terms that attempt to bind consumers to arbitration for unrelated future disputes or interactions with corporate affiliates.

These “infinite” arbitration clauses have produced absurd and unfair outcomes—such as the Disney+ case, where a wrongful death lawsuit was nearly forced into arbitration because the victim’s spouse had once signed up for a Disney+ trial subscription years earlier. Similar cases involving Airbnb, Walmart, and DIRECTV have shown how corporations use sweeping clauses to limit consumers’ right to seek justice in court.

Read full text: Senate Bill 82 - Contracts: consumer goods and services: dispute resolution provisions

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 Senator Thomas J. Umberg represents the 34th Senate District, which includes the cities of Anaheim, Buena Park, Fullerton, Garden Grove, La Habra, Long Beach, Orange, Placentia, Santa Ana, and East and South Whittier. Umberg is a retired U.S. Army Colonel, former federal prosecutor, and small businessman. He and his wife, Brigadier General Robin Umberg, USA (ret.), live in Orange County.