Appellate court finds arbitration agreement unconscionable in DirecTV case

Rachel Weinhaus Jul. 17, 2007, 10:35am

Robert P. LeChien

Bruce Stewart

The Fifth Appellate Court has affirmed a decision by St. Clair Circuit Judge Robert P. LeChien who denied DirecTV's motion to stay proceedings in a class action suit and compel arbitration against customer Charlotte Bess.

While Justice Bruce Stewart, who wrote the opinion for the court July 7, did find that Bess waived her argument that she did not knowingly waive her right to a jury trial, the appellate upheld the lower court's findings that the arbitration agreement in DirecTV's customer agreement contract was both procedurally and substantively unconscionable.

DirecTV's first argument regarding the arbitration agreement was that the circuit court improperly analyzed the unconscionability of the customer agreement as a whole, which it believed should be determined by the arbitrator and not the court.

The court disagreed, stating that Bess was not challenging the validity of the customer agreement in its entirety but only the validity of the arbitration provision itself, therefore the court should have discretion and not the arbitrator.

DirecTV had argued in its brief that its customer agreement was not an adhesion contract under Illinois law and that the arbitration provision within the customer contract was conspicuous since it was in bold type-face.

The court disagreed stating that the parties are in disparate bargaining positions and the contract was offered on a take-it-or-leave-it basis.

The court also rejected DirecTV's argument that the provision was conspicuous to customers, stating the Agreement was "hidden in a maze of fine print," and therefore, procedurally unconscionable.

Justice Donovan dissented, stating that he did not believe the level of procedural unconscionability found by the court was sufficient to render the provision unenforceable.

The plaintiff was represented by David A. Nester of Nester & Constance.

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