California SB 82 — a bill that seeks to end “infinite” arbitration clauses and limit the scope of consumer arbitration agreements to the “use, payment, or provision of the good, service, money, or credit provided by that consumer use agreement” — is on its way to becoming law. The California State Assembly passed the bill on Sept. 9, 2025, after it passed in the Senate on June 2. SB 82 was ordered to engrossing and enrolling, which should take one to seven days, after which it will head to Gov. Gavin Newsom, who will have 12 days to sign it. If enacted, SB 82 would slide into section 1670.15 of California’s civil code and take effect on Jan. 1, 2026. Consumer-facing companies in California may want to re-examine their consumer-use agreements if the bill passes.
Sen. Tom Umberg, who represents a portion of northern Orange County that includes Anaheim and Disneyland, introduced SB 82 on Jan. 17, 2025. Media attention surrounding a wrongful death case in which a Walt Disney World patron in Florida died from a food allergy sustained at a restaurant in the park helped spark this legislation. Disney initially filed a motion to compel arbitration based on the plaintiff’s contract with Disney through its streaming service, Disney+. Public outcry over the tenuous connection between Disney+ and a restaurant at Disney World led Disney to reverse that position and withdraw the motion to compel. However, Disney suffered public relations damage as hundreds of thousands of consumers interacted with this story on social media.
SB 82 only affects consumer-use agreements, which the bill defines as “a contract between a person and a consumer that the consumer enters into in order to use, receive, or otherwise enjoy a good, service, money, or credit.” The bill prohibits waiver of its effect. SB 82 will most likely be challenged in court to test preemption by the Federal Arbitration Act on the grounds that SB 82 disfavors the formation of arbitration agreements.
Companies doing business in California should be mindful of whether their consumer dispute resolution agreements extend to other parts of a consumer relationship beyond the product or service covered by the agreement at the time of execution.
