As we head into the new year, California’s Senate Bill (“SB”) 82, effective January 1, 2026, is set to spark some fireworks. The Bill seeks to curb the reach of arbitration provisions in consumer contracts by voiding so-called “infinite” arbitration clauses. According to SB 82, the scope of consumer arbitration agreements must be limited to the “use, payment, or provision of the good, service, money, or credit provided by that consumer use agreement.” Any attempt to waive this provision will be deemed contrary to public policy and unenforceable.
While courts in California already impose a high burden on parties seeking to enforce arbitration provisions, especially if contained within an online agreement such as website terms of use, arbitration clauses that cover all claims and disputes broadly “related to” the underlying transaction are routinely upheld under current Ninth Circuit case law. SB 82 is aimed at preventing what lawmakers view as overly broad arbitration terms which try to enforce arbitration for all future disputes, including those unrelated to the original agreement. Legislative efforts leading to the passage of SB 82 were spurred in part by a wrongful death lawsuit against media mogul Disney, wherein a husband seeking compensation for his wife’s death at a Disney theme park was initially compelled to arbitrate his claims due to a clause buried in the terms of a Disney+ trial subscription he had signed years earlier. Supporters of the Bill, including Consumer Attorneys of California, the Consumer Federation of California, and Consumer Watchdog, see SB 82 as a measure to restore fairness and transparency by preventing the use of arbitration clauses to shield corporations from legal accountability in unrelated matters.
Critics of the SB 82, including the Chamber of Commerce, the Civil Justice Association of California, and the California Bankers Association, believe the Bill will prove burdensome and frustrating for businesses, consumers, and courts, resulting in a spate new cases litigating disputes or issues reasonably related to a sale, lease, or credit contract, and whether they are or are not within the scope of arbitration. Moreover, SB 82 does not specify that it applies only to contracts entered after January 1, 2026, raising an open question as to its retroactive application—and potentially voiding thousands of preexisting arbitration agreements. Opponents also contend that SB 82 is likely preempted by the Federal Arbitration Act, which directs courts to look favorably upon arbitration agreements and places them on equal footing with other contracts. In response, the Bill’s authors argue that SB 82 does not disfavor arbitration agreements in consumer contracts and only requires such clauses to apply to the subject of the relevant contract.
For businesses engaged in telemarketing and lead generation, this change is likely to create waves. Arbitration clauses have been an important tool in managing TCPA exposure, with several courts dismissing TCPA cases (including class actions) where the plaintiff was found to have entered into a valid and binding arbitration agreement. With the passage of SB 82, TCPA defendants will face the additional hurdle of showing that at-issue calls or texts are closely tied to a consumer’s underlying agreement or transaction for arbitration to apply. This could be particularly challenging in the third-party lead generation space, where businesses may be relying on the enforcement of an arbitration clause as third-party beneficiaries to a contract. When a consumer receives a call from a downstream marketer, SB 82 will make it significantly harder to argue that the dispute stems from the contract where consent or terms were first agreed to. The result may be more TCPA lawsuits in California courts, at least until clear guidance emerges. In the meantime, companies operating in California should closely review their arbitration language and watch out for provisions with a broad sweep.
It’s not all bad news though. Just this morning, Queenie published Queenie’s Ten—a set of best practices designed to guide the structure, format, and presentation of website disclosures. These 10 simple principles are a must-read for any business looking to enforce online agreements, including arbitration provisions. Check them out here: https://tcpaworld.com/2025/12/22/queenies-ten-finally-an-authoritative-consent-format-guide-queenies-ten-is-the-checklist-youve-been-looking-for/
Continue to stay ahead of the curve—join The Czar’s compliance deep dive at Lead Generation World on January 6, 2026.
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