De La Torre v. CashCall, Inc., 236 Cal. Rptr. 3d 353

Plaintiffs (De La Torre and Saysourivong) sued CashCall, alleging its unsecured $2,600 consumer loans (APR ~96% then 135%) to credit‑impaired borrowers violated California’s Unfair Competition Law (UCL) because the loans were unconscionable under Fin. Code § 22302.
The district court certified a class of California borrowers who took $2,500–$2,600 loans at ≥90% interest, then granted CashCall summary judgment, reasoning courts should not second‑guess legislative economic policy and that § 22303’s removal of rate caps for loans ≥$2,500 precluded unconscionability review.
The Ninth Circuit certified the question whether interest rates on consumer loans ≥ $2,500 (governed by § 22303) may render loans unconscionable under § 22302; the California Supreme Court accepted certification.
The Financial Code contains § 22303 (numerical rate caps for loans < $2,500) and § 22302 (incorporating Civ. Code § 1670.5 — the unconscionability doctrine — into consumer lending law).
The Court held that interest rates are price terms and may be found unconscionable under § 22302 even for loans of $2,500 or more; § 22303’s exclusion of larger loans from numeric caps does not immunize such loans from unconscionability review.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether an interest rate on consumer loans of $2,500 or more may render the loan unconscionable under Fin. Code § 22302	§ 22302 makes unconscionable loans unlawful; interest is a price term and can be unconscionable even for loans ≥ $2,500	§ 22303 removed rate caps for loans ≥ $2,500, so the Legislature intended such rates not to be subject to unconscionability review; judicial intrusion on economic policy is improper	Held: Yes. § 22302 (via Civ. Code § 1670.5) applies to loan price terms; courts may find an interest rate unconscionable based on total context even for loans ≥ $2,500.
Whether courts should abstain / decline to adjudicate unconscionability of high rates because of separation‑of‑powers or agency primacy concerns	Plaintiffs: courts should enforce § 22302 and UCL; judicial review is appropriate and Legislature provided the basis	CashCall: judicial review would amount to de facto rate setting, undermine market, and intrude on legislative/administrative prerogatives	Held: No categorical abstention. Legislature authorized unconscionability review; courts may adjudicate carefully and craft tailored equitable remedies without substituting for legislative policy.

Sanchez v. Valencia Holding Co., 61 Cal.4th 899 (2015) (describes unconscionability as addressing "unreasonably and unexpectedly harsh" contract terms and requires contextual analysis)
Perdue v. Crocker Nat’l Bank, 38 Cal.3d 913 (1985) (price terms, including interest, may be unconscionable; courts must consider basis and justification for price)
Sonic-Calabasas A, Inc. v. Moreno, 57 Cal.4th 1109 (2013) (unconscionability concerns price and central aspects of transactions; doctrine is context dependent)
Carboni v. Arrospide, 2 Cal.App.4th 76 (1991) (applied unconscionability to an excessive interest rate; rare but possible)
Armendariz v. Found. Health Psychcare Servs., Inc., 24 Cal.4th 83 (2000) (explains procedural and substantive unconscionability and sliding‑scale analysis)
Cel‑Tech Commc’ns, Inc. v. Los Angeles Cellular Tel. Co., 20 Cal.4th 163 (1999) (UCL "borrows" violations of other laws and makes them independently actionable; safe‑harbor principles explained)
Boyce v. Fisk, 110 Cal. 107 (1895) (historical recognition that excessive interest with other oppressive circumstances can justify setting aside a contract)
Bridge v. Kedon, 163 Cal. 493 (1912) (courts may provide equity where interest is exorbitant or terms unconscionable)