Fisher v. MoneyGram International, Inc.

Summary

The California Court of Appeal considered whether an arbitration provision in MoneyGram’s consumer money-transfer agreement was enforceable. The court held that the provision was procedurally and substantively unconscionable because it was presented in tiny, difficult-to-read print on the back of an adhesion contract and imposed one-sided limitations and costs. The court affirmed the superior court’s denial of MoneyGram’s petition to compel arbitration.

Holdings

1. The arbitration provision was procedurally unconscionable because it was contained in an adhesive consumer contract and was presented with an extremely high degree of surprise: it appeared on the back of the Send Form in a dense block of faint, cramped 6-point type that was practically unreadable.
2. The arbitration provision was substantively unconscionable because, considered in the aggregate, its one-year limitations period, use of AAA Commercial Rules and associated fees, and apparent waiver of statutory attorney-fee recovery imposed an undue and one-sided burden on consumers.
3. The entire arbitration provision was unenforceable as unconscionable.
4. The superior court did not abuse its discretion by refusing to sever the unconscionable provisions and enforce the remainder of the arbitration agreement.

Questions Presented

1. Whether the arbitration provision in MoneyGram's consumer money-transfer contract was procedurally unconscionable because it was presented on a take-it-or-leave-it form, hidden on the back of the form, and printed in extremely small and difficult-to-read type.
2. Whether the arbitration provision was substantively unconscionable because it shortened the limitations period, required commercial rather than consumer AAA arbitration, imposed potentially prohibitive arbitration fees, and required each party to bear its own expert and attorney fees.
3. Whether the arbitration provision was unenforceable in its entirety under California's sliding-scale unconscionability doctrine.
4. Whether the superior court abused its discretion by refusing to sever the unconscionable provisions.

Disposition

affirmed