Another Arbitration Provision Bites the Dust
A little over a month ago, the Ninth Circuit ruled in Davis v. O’Melveny & Myers, case no. 04-56039 (9th Cir. May 14, 2007) that the arbitration provision in the employment contract of a prominent, powerful L.A.-based law firm was unenforceable. Not just unenforceable, but “shock the conscience” unenforceable. . .
Just as you’re asking yourself, “If a high-powered law firm can’t draft an enforceable arbitration provision for its own contracts, then who can?” comes Gatton v. T-Mobile USA, Inc., case no. A112082 (June 22, 2007), in which the arbitration provision in T-Mobile’s customer agreement gets similar treatment in California state court. The First District Court of Appeal holds that T-Mobile’s arbitration provision in its customer agreements is unenforceable because of the minimal degree of procedural unconscionability arising from its adhesive nature and the “high degree of unconscionability arising from the class action waiver.”
I’m going to go out on a limb and say that T-Mobile probably had pretty good lawyers draft its agreement, and that the lawyers who drafted the provision for O’Melveny were no slouches, either. Who will fall next?