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Monday, August 4, 2014

Arbitration and Unconscionability

Savannah Law Professor Susan Landrum has written Much Ado About Nothing?: What the Numbers Tell Us About How State Courts Apply the Unconscionability Doctrine to Arbitration Agreements  Marquette Law Review, Vol. 97, No. 3, 2014.

The abstract:

This Article evaluates how state courts have applied the unconscionability doctrine to contracts, including those involving arbitration agreements. Numerous scholars have been critical of state courts’ application of the unconscionability doctrine to arbitration agreements and have argued that, because state courts are often skeptical or even hostile to arbitration, at least some state courts have used the unconscionability doctrine more often to invalidate arbitration agreements than other types of contract provisions. These assumptions hold true for some individual states or limited time periods, but further research was necessary to determine if the assumptions are true more broadly. For purposes of this study, I analyzed the unconscionability case law, a total of 460 cases, from twenty states — Alaska, Arkansas, Colorado, Illinois, Maine, Maryland, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, Ohio, Oregon, Rhode Island, South Carolina, and Vermont — during the time period from 1980 to 2012. The results of my research demonstrate that there is significant variation in how courts apply the unconscionability doctrine. Moreover, this Article shows that, for many of these states, the assumptions that scholars have had regarding state courts’ hostility to arbitration agreements, and those courts’ willingness to use the unconscionability doctrine as a means of invalidating arbitration provisions, are not always supported by the case law. Instead of applying generalized assumptions, it is necessary to delve deeper into the case law of each individual state to understand that state’s use of the unconscionability doctrine in the context of arbitration agreements.

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