Indiana Forum Clause Was Important Factor In Finding Of Substantive Unconscionability.
The Fourth District, Division One, concludes the trial court correctly determined the arbitration provision between an Indiana-based company soliciting business in California, and California residents, who were Licensed Vocational Nurses seeking to become Registered Nurses, was unconscionable. Magno v. The College Network, Inc., D067687 (4/1 6/14/16) (McConnell, Nares, O’Rourke) (unpublished).
The finding of procedural unconscionability was based on evidence that the Plaintiffs were young, rushed through the signing process, had no ability to negotiate, and did not see arbitration language buried on a back page in preprinted forms.
The finding of substantive unconscionability was chiefly based on the insertion of a forum selection clause providing for binding arbitration in Indiana, before an arbitrator selected by TCN.
The court found it necessary to distinguish Carnival Cruise Lines v. Shute, 499 U.S. 585 (1991), “which upheld a forum selection clause requiring Washington State residents to pursue litigation in Florida.” Whereas the plaintiffs in Carnival conceded notice of the forum selection clause, here there was substantial evidence that the plaintiffs were unaware of the arbitration provision altogether as well as the forum-selection clause. Moreover, unlike Carnival, “this dispute [is] an essentially local one inherently more suited to resolution in the State of [California] than in [Indiana].”
Affirmed.
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