Sixteen Page Majority Decision Draws Fifteen Page Concurrence And Dissent From Justice Segal.
If an agreement to arbitrate is unconscionable, why should decisions about arbitrability ever be sent to the arbitrator? Answer: ordinarily, it is presumed that decisions about arbitrability are to be made by the judge, and therefore a determination that the agreement is unconscionable will not be sent to the arbitrator. And if the judge decides that the arbitration agreement is unconscionable, the arbitrator will never get to decide anything. The exception to this rule, however, is that the parties may agree to delegate to an arbitrator the authority to decide questions of arbitrability -- and that can include whether the arbitration agreement is unconscionable.
In Advanced Air Management, Inc. v. Gulfstream Aerospace Corporation, B265723 (2/7 9/6/17) (Menetrez, Zelon; Segal, concurring and dissenting) (unpublished), the trial court held that an agreement between the plaintiff and the defendant was unconscionable. Judge Menetrez, sitting by designation, and Justice Zelon, however, reversed the trial court's order denying Gulfstream's petition to compel arbitration, because the incorporation of AAA Commercial Rules delegated the decision-making authority on the unconscionability issue to the arbitrator. As a result, the arbitrator will get to decide the unconscionability issue.
Justice Segal concurred and dissented. He concurred that the parties agreed to delegate the issue of arbitrability to the arbitrator. However, he would have held that Gulfstream invited error it argued the trial court made in deciding the issue, because Gulfstream asked the court to decide the issue. However, Justice Segal believed that the arbitration provision was not unconscionable.
COMMENT: Apparently Gulfstream did not explicitly reference arbitrability in its petition to compel arbitration. Justice Segal explains that Gulfstream argued that it asked the court to refer arbitrability to the arbitrator "by asking the court to compel Advanced Air to arbitrate the claims raised in its complaint" and that one of the claims raised in Advanced Air's complaint "was that the arbitration clause was unconscionable." Justice Segal then sets forth verbatim the dense language in Advanced Air's complaint, and challenges the reader to find the hook upon which Gulfstream is hanging its argument that it preserved the issue of delegating to arbitration whether the arbitration clause was unconscionable. "Did you miss it?" asks Justice Segal, adding "So did I." Actually, I did not miss it the first time. But thanks to Justice Segal, I was looking for the language on which Gulfstream relied.
Comments