Karl Bayer's Disputing Blog » unconscionability

Supreme Court Agrees to Hear Arbitration Unconscionability Case

By Victoria VanBuren - January 18, 2010

The U.S. Supreme Court has granted certiorari to Jackson v. Rent-A-CenterWest, Inc. , No. 07-16164 (9th Cir. Sept. 9, 2009). The question presented is whether a district court is in all cases required to determine claims that an arbitration agreement subject to the Federal Arbitration Act (“FAA”) is unconscionable, even when the parties to the contract have clearly and unmistakably assigned this “gateway” issue to the arbitrator for d

CPR Arbitration Article: Thankful for Unanswered Prayers? Unconscionability ‘Equilibrium’

By Victoria VanBuren - October 12, 2009

Donald R. Philbin Jr., contributor to this blog, has written recently an article entitled Thankful for Unanswered Prayers? Unconscionability ‘Equilibrium,’ 27 Alternatives to the High Cost of Litigation 145 (Oct. 2009). As its title suggests, the article discusses the salient issue of unconscionability in arbitration agreements. Here is an excerpt: Collision? Or Coexistence? The issue: The states and the Supreme Court—and now Congress

Ninth Circuit Finds Class Action Waiver Unconscionable

By Victoria VanBuren - March 31, 2009

In Chalk v. T-Mobile USA, Inc., No. 06-35909 (9th Cir. Mar. 27, 2009), the issue before the Ninth Circuit is whether a class action waiver in an agreement between T-Mobile and its customers is unconscionable under Oregon law. Steward and Chalk (plaintiffs) bought from T-Mobile a PC card manufactured by Sony. The card enables computers to connect wirelessly to the Internet. By signing the one-year service agreement with T-Mobile, the plaintiffs ac

Class Action Arbitration Waiver Found Unenforceable

By Victoria VanBuren - February 12, 2009

On January 30th, 2009, the Second Circuit refused to enforce an arbitration clause contained in American Express Co. merchants’ agreement. In Re: American Express Merchants’ Litigation, No. 06-1871 (2d Cir. 2009). The clause would prevent merchants who accept the card from bringing class-action antitrust claims against American Express. Like the Texas Supreme Court in In re Poly-America, L.P., the Second Circuit cited section 2 of the

Unconscionable Arbitration Agreement: A First for Texas

By Victoria VanBuren - February 2, 2009

In a surprising decision (that almost went unnoticed because of the Holidays and warm Texas weather) arbitration provisions in an employment agreement were found unconscionable by the Texas Supreme Court. In re Poly-America, L.P., 262 S.W.3d 337 (Tex. 2008) involves a retaliatory-discharge claim under the Texas Worker’s Compensation Act (the “Act”) . Justice Brister filed a dissenting opinion. The facts of the case are as follows. In

We Shall Not Waiver

By Karl Bayer - November 5, 2008

Perry Homes has once again been applied to describe what constitutes an arbitration waiver, except this time no waiver was found. As we have mentioned before in While We Were Out, a post from May, waiver is hard to come by in a Texas Supreme Court opinion. Perry Homes could have moved us into a parallel universe in which claiming waiver of arbitration is a winning argument. But those who criticized the opinion knew we would be making no such move

Fifth Circuit Rules on Cost as a Basis for Not Arbitrating

By Rob Hargrove - August 24, 2006

Yesterday, the Fifth Circuit handed down an opinion stemming from a Mississippi case (link is to .pdf file) weighing in on the notion that prohibitive expense of arbitration can be a basis for a court’s refusal to compel arbitration on unconscionability grounds. The Court reversed the district court refusal to compel arbitration in this case, finding that the party seeking to avoid arbitration (a chicken farmer named Gertrude Overstreet) pr

Is unconscionability becoming a stronger basis for denying enforcement of arbitral awards?

By Karl Bayer - September 20, 2005

Guest blogger, Rick Freeman, wrote yesterday about a recent San Antonio Court of Appeals case upholding a finding that the AAA‘s estimate of costs and fees was so high as to make the requirement of arbitration unconscionable. Today the U.S. District Court for the Western District of Missouri found an arbitration procedure developed by Amway and JAMS was substantively unconscionable. Judge Dorr could not accept (see p.24) the defendants R