{"id":2082,"date":"2026-07-26T12:46:19","date_gmt":"2026-07-26T12:46:19","guid":{"rendered":"https:\/\/gifted-chandrasekhar.174-138-183-210.plesk.page\/?page_id=2082"},"modified":"2026-09-24T19:47:49","modified_gmt":"2026-09-24T19:47:49","slug":"unconscionability","status":"publish","type":"page","link":"https:\/\/gifted-chandrasekhar.174-138-183-210.plesk.page\/?page_id=2082","title":{"rendered":"Unconscionability"},"content":{"rendered":"\t\t
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UNCONSCIONABILITY<\/strong><\/h2>\n\t\t\t\t\t

Cook v. University of Southern California, 102 Cal. App. 5th 312<\/em><\/strong>

Heckman v. Live Nation Entertainment, Inc.. 120 F. 4th 670<\/em><\/strong>

Jenkins v. Dermatology Management LLC, 107 Cal. App. 5th 633<\/em><\/strong>

Ronderos v. USF Reddaway, Inc., 114 F. 4th 1080<\/em><\/strong>

Ramirez v. Charter Communications, Inc., 16 Cal. 5th 478<\/em><\/strong>



Cook v. University of Southern California, 102 Cal. App. 5th 312<\/em><\/strong>

Cook filed a lawsuit against USC, her former employer, alleging various discrimination claims. USC moved to compel arbitration. The arbitration agreement was a condition of employment and provided that it applied to all claims by the parties \u201cwhether or not arising out of the Employee\u2019 University employment\u201d and it further provided that it survived the termination of Cook\u2019s employment and could only be terminated by a written document by the university president. The agreement also required Cook to arbitrate any and all claims she may have against USC \u201cor any of its related entities\u201d but did not require USC's \u201crelated entities\u201d to arbitrate their claims against Cook. The trial court denied the motion, holding that the agreement was substantively unconscionable because it applied to any claim that Cook might have against the university, even if it did not involve her employment, that it could be of infinite duration, and that it lacked mutuality. USC appealed and the Court of Appeal affirmed.

USC asserted that the parties did not contemplate the \u201cabsurd result\u201d characterized by the trial court\u2019s interpretation of the scope clause and instead were trying to cover claims arising out of Cook\u2019s termination or claims alleging retaliation. The Court countered that if USC had been concerned about capturing termination or retaliation claims related to Cook's employment, it simply could have limited the scope of the agreement to claims arising out of or relating to her employment or termination.

USC argued the agreement instead should be construed to be terminable at will after a reasonable time because it did not specify a term of duration. But the arbitration agreement here specifically provided that it would survive unless and until USC's president terminated it in a writing, signed by both parties, which expressly mentioned the arbitration agreement. This was an express term of duration.

USC contended that the provision that allowed \u201crelated entities\u201d to sue was designed to enable third party beneficiaries to take part in the arbitration non-signatories may enforce arbitration agreements as third-party beneficiaries. The Court of Appeal replied that USC had missed the point. The concern was that the agreement provided benefits to broad swaths of third-party beneficiaries only in favor of USC without any showing of justification for this one-sided treatment. This conferred a benefit on USC and its broadly defined \u201crelated entities\u201d that was not mutually afforded to Cook.

Heckman v. Live Nation Entertainment, Inc.. 120 F. 4th 670<\/em><\/strong>

The plaintiffs filed a class action against Live Nation, after using the Ticketmaster website to purchase Live Nation concert tickets, alleging violation of the Sherman Act. Defendants moved to compel individual arbitrations pursuant to an arbitration agreement on the Ticketmaster website. The agreement initially stated that JAMS would be the provider, but Ticketmaster could modify the agreement unilaterally and so it retroactively amended it to name New Era as the provider because New Era created rules for mass arbitrations. The agreement permitted the arbitrator to batch complaints and select one or more bellwether cases from the batch. The award would bind claimants in the non-bellwether cases. The district court denied the motion to compel, finding that the agreement was procedurally and substantively unconscionable. Defendants appealed.

The Ninth Circuit affirmed. The agreement was procedurally unconscionable because its terms could be changed without notice and the changes applied retroactively. Binding consumers who merely browse a website to the terms specified on the website has been consistently held to be unenforceable. Indeed, customers here were required to revisit the website to access and use previously purchased tickets.

The terms on Ticketmaster's website were affirmatively misleading. They stated that all claims would be resolved by \"individual arbitration,\" and not \"in any purported class or representative proceeding.\" This statement was flatly inconsistent with New Era's rules, which contemplated that cases with common issues or facts would be batched, and that \"batched\" claims were not resolved by individual arbitration but were rather treated in a \"class or representative\" fashion.

The mass action protocol was substantively unconscionable. The rules provided for mass arbitration whenever more than five cases involved common issues of law or fact. Although the rules purportedly provided that determination of whether cases involved common issues of law and fact rested solely in the hands of the neutral, a close reading of the rules revealed that the arbitrator could not be determined without input from the lawyers representing the plaintiffs, and the lawyers representing the plaintiffs could not be identified until after the batching decision was made. Thus, New Era would always unilaterally decide which cases would proceed in a batch, not the arbitrator.

In addition, while the rules purported to give plaintiffs an equal say in the selection of the arbitrator through a rank and strike process, New Era could replace a neutral at its sole discretion, upon what New Era ADR deemed \u201ca legitimate request or concern or upon unforeseeable circumstances.\"

The agreement provided that three \"bellwether cases\" were chosen from the batched cases and the arbitrator's decisions in these cases became \"precedent\" on all common issues in the batched cases, as well as in any later-filed cases added to the batch. Plaintiffs had the right to remove their cases from a batch, but only after the parties in both the bellwether cases and the non-bellwether cases participated in a settlement conference that would occur after the arbitrator\u2019s decision and only if they could show their cases shared no common issues of law and fact with the bellwether cases. It was unclear how a batched plaintiff who did not participate in the bellwether case could demonstrate this, because the rules did not provide access to the bellwether record for non-bellwether plaintiffs in the batch. Thus, a decision by the arbitrator in a bellwether case that favored a defendant would be binding on non-bellwether plaintiffs, who had no chance to participate in the arbitration and who were ignorant of the decision until it was invoked against them.

Finally, there was a lack of mutuality with respect to injunctive relief. An award of injunctive relief by the arbitrator could be appealed to a separate panel of arbitrators, but a denial of injunctive relief could not be appealed. As a practical matter, given that injunctive relief would virtually always be sought by the plaintiff rather than by the defendant, this provision operated asymmetrically. It provided a right of appeal if the plaintiff's request for an injunction was granted but denied a right of appeal if the plaintiff's request was denied

.Jenkins v. Dermatology Management LLC, 107 Cal. App. 5th 633<\/em><\/strong>

After she was terminated by the defendant, the plaintiff filed a class action against it, asserting unfair competition. Defendant\u2019s motion to compel arbitration, which was executed by defendant\u2019s Chief People Officer several months before plaintiff was hired, was denied on the ground that the arbitration agreement was procedurally unconscionable because it was a non-negotiable adhesion contract, and was substantively unconscionable because it lacked mutuality, reduced the statute of limitations, restricted discovery, and required the parties to share arbitrator and forum fees. The defendant appealed.

The defendant argued that the agreement could not have been found to be procedurally unconscionable because plaintiff failed to file a declaration recounting the circumstances of the signing, while it filed a declaration in which it averred that its \u201cpractice manager\u201d was available to answer any questions during the signing process. The court agreed with the trial court. It wondered how could the plaintiff be expected to negotiate with the practice manager a contract that had been pre-signed by the chief people officer. There was no evidence that plaintiff had any opportunity to negotiate or refuse to sign the arbitration agreement. In any event, a complaining party need not show it tried to negotiate standardized contract terms to establish procedural unconscionability. The agreement was a contract of adhesion.

The plaintiff sought injunctive and other equitable relief for violations of the Unfair Competition Law (UCL). A UCL action is equitable in nature; damages cannot be recovered. The agreement required the UCL action to be arbitrated, but it did not require the defendant to arbitrate an action against plaintiff for injunctive or other equitable relief for unfair competition. In Martinez v. Master Protection Corp. <\/em>(2004) 118 Cal.App<\/a>.4th 107, 115, the court concluded that a similar provision was substantively unconscionable for lack of mutuality.

Any action on a UCL cause of action is subject to the four-year period of limitations created by Business and Professions Code section 17208. The agreement provided that any claim made after one year was void and deemed waived. Parties may agree in an arbitration agreement to shorten the limitations period applicable to a claim. However, the shortened limitations period must be reasonable. Where arbitration provisions undermine statutory protections, courts have readily found unconscionability. Accordingly, the shortened oneyear limitations period provided by the arbitration agreement herein was unconscionable and insufficient to protect employees' ability to vindicate their statutory rights.

The agreement provided that all forum and arbitrator fees had to be split. When an employer imposes mandatory arbitration as a condition of employment, the arbitration agreement or arbitration process cannot generally require the employee to bear any type of expense that the employee would not be required to bear if he or she were free to bring the action in court. Thus, an employer can compel arbitration of a claim only if the arbitration agreement does not require employees to pay any arbitrators' fees or expenses as a condition of access to the arbitration forum. Defendant contended the provision was not substantively unconscionable because the arbitration agreement was governed by AAA rules, requiring defendant to pay arbitration costs. But the agreement prevails over AAA rules. The agreement provided, \u201c[Defendant] and [plaintiff] agree that, except as provided in this Agreement<\/em>, any arbitration shall be in accordance with the then-current [rules] of the American Arbitration Association.\u201d (Italics added.)

The defendant argued <\/em>that the court could have easily severed the unconscionable clauses from the agreement. The court declined to do so. Even if a contract can be cured, the court should also ask whether the unconscionability should be cured through severance or restriction because the interests of justice would be furthered by such actions. This part of the inquiry focuses on whether mere severance of the unconscionable terms would function to condone an illegal scheme and whether the defects in the agreement indicated that the stronger party engaged in a systematic effort to impose arbitration on the weaker party, not simply as an alternative to litigation, but to secure a forum that worked to the stronger party's advantage. If the answer to either question is yes, the court should refuse to enforce the agreement. In conducting this analysis, the court may also consider the deterrent effect of each option. Severing multiple unconscionable provisions from an agreement and enforcing the remainder could create an incentive for an employer to draft a one-sided arbitration agreement in the hope employees would not challenge the unlawful provisions, but if they did, the court would simply modify the agreement to include the bilateral terms the employer should have included in the first place. Although there are no bright-line numerical rules regarding severance, the greater the number of unconscionable provisions a contract contains the less likely it is that severance will be the appropriate remedy

Ronderos v. USF Reddaway, Inc., 114 F. 4th 1080<\/em><\/strong>

Plaintiff Ronderos sued Reddaway, his former employer, for violation of the Fair
Employment and Housing Act (FEHA) and various labor laws. The district court denied
Reddaway\u2019s motion to compel arbitration, finding the agreement procedurally unconscionable because it required the parties to split arbitrator fees and arbitration costs and substantively unconscionable because it required Ronderos to file a notice to Reddaway at an office in Ohio or else waive his claim and further requiring him to do so within one year after the claim arose. Reddaway appealed.

The Ninth Circuit agreed that the cost splitting provision was procedurally unconscionable. Reddaway argued that the provision simply set forth in plain language the rule set forth in Armendariz v. Foundation Health Psychcare Services, Inc., <\/em>24 Cal. 4th 83 (2000).<\/em> that \u201cthe arbitration agreement or arbitration process cannot generally require the employee to bear any type of expense that the employee would not be required to bear if he or she were free to bring the action in court.'\" But there was no such plain statement in the agreement. If Reddaway did not intend to require California employees like Ronderos to split the cost of arbitration because such a requirement conflicted with California law, Reddaway could have made that clear in plain language. Instead, Reddaway's agreement indicated only that the cost-splitting requirement would not apply if it conflicted with a statute or case law, without specifying that California law would control and without acknowledging that a conflict with California law actually existed. Moreover, it created the impression that employees like Ronderos would have to pay significant costs if they file an arbitration claim. And, by creating that impression, the provision likely deterred employees from filing claims.

The statute of limitations reduction was substantively unconscionable because it was imposed on only Ronderos's claims. Further, it restricted Ronderos's employment rights in at least three ways. <\/em>First, it significantly shortened the amount of time that he had to bring an employment-related claim. Here, Ronderos's claims under the FEHA and his claim for untimely payment of wages were both subject to at least a three-year statute of limitations. Consequently, the provision was an unconscionable vehicle for the waiver of Ronderos's statutory rights. Second, it deprived Ronderos of the benefit of the continuing violation doctrine. Third, the one-year statute of limitations started to run when Ronderos's claim arose\u2014not when he knew or reasonably should have known about the claim. This meant that the provision also deprived Ronderos of the availability of the discovery rule which, where applicable, indefinitely delayed accrual of a cause of action until the plaintiff discovered or reasonably had cause to discover the facts constituting it.

The court also declined to sever the unconscionable clauses, notwithstanding a provision in the agreement calling for severance. Given the multiple unlawful provisions, the district court did not abuse its discretion in concluding that the arbitration agreement was permeated by an unlawful purpose. Reddaway cited several cases in which trial courts exercised their discretion to sever multiple unconscionable provisions. Although the fact that an agreement contains more than one unconscionable provision does not preclude a trial court from severing, an agreement can be considered permeated by unconscionability if it contains more than one unlawful provision.

Ramirez v. Charter Communications, Inc., 16 Cal. 5th 478<\/em><\/strong>

The trial court denied Charter\u2019s motion to compel arbitration after finding three instances of unconscionability, to wit, a clause that exempted from arbitration claims that Charter was more likely to bring, a provision that allowed for attorney fees following a successful motion to compel arbitration, and a prevailing party attorney fee clause which allowed Charter to collect attorney fees even if the plaintiff\u2019s claim was not frivolous. It also declined to sever the unconscionable clauses. Charter appealed. The Supreme Court affirmed the lower court\u2019s ruling on unconscionability, but remanded with respect to the issue of severability

The arbitration agreement lacked mutuality because it specifically excluded claims related to intellectual property rights and severance or noncompete agreements, claims for equitable relief related to unfair competition or the disclosure of trade secrets or confidential information, and claims for theft or embezzlement. Further, several of the exclusions for employee claims were illusory. Workers' compensation and unemployment insurance claims are excluded from arbitration by law. Claims that have expired under an applicable statute of limitations cannot be brought in court. Thus, the contractual exclusion of those claims provided no additional benefit to employees.

The limitations clause was also unconscionable. It provided that the limitations period was the same as the time required by statute to file a claim with an administrative agency. Ramirez had a FEHA claim. A FEHA administrative claim must be filed with the DFEH within one year of the employer's discriminatory act. DFEH has up to one year from the filing of the administrative claim to complete its investigation and issue a \u201cright-to-sue\u201d letter, and a lawsuit alleging FEHA claims must be filed within one year of the issuance of the \u201cright-to-sue\u201d letter. Thus, the outside limit to file a FEHA lawsuit could be as long as three years. The arbitration agreement therefore cut the period that would otherwise apply to file a FEHA action in court from three years to one year and it subjected the employee to the possibility of filing an arbitration demand before DFEH completed its investigation and issued a right-to-sue letter. This limitation truncated the period employees need to effectively vindicate their rights.

Section K of the agreement provided for a prevailing party to recover its attorney fees while FEHA provides that a prevailing defendant could only recover attorney fees if the plaintiff\u2019s claim was frivolous, groundless, or unreasonable when brought. Section K was unconscionable because it unambiguously violated FEHA. The policy favoring arbitration could not save it.

With respect to severability, Charter argued that the lower court applied a non-existent rule that severance cannot occur if there was more than one instance of unconscionability. It also argued that the lower court ignored a provision in the agreement calling for severance of any provision found to be unconscionable. The Supreme Court agreed and remanded the matter to the trial court and instructed it to decide the issue once again. No bright-line rule requires a court to refuse enforcement if a contract has more than one unconscionable term. Likewise, a court is not required to sever or restrict an unconscionable term if an agreement has only a single such term. Instead, the appropriate inquiry is qualitative and accounts for each factor. At the outset, a court should ask whether the central purpose of the contract is tainted with illegality. If so, the contract cannot be cured, and the court should refuse to enforce it. If that is not the case, the court should go on to ask first whether the contract's unconscionability can be cured purely through severance or restriction of its terms, or whether reformation by augmentation is necessary. If no reformation is required, the offending provision can be severed or limited. If unconscionability cannot be cured by extirpating or limiting the offending provisions, but instead requires augmentation to cure the unconscionability, then the court should refuse to enforce the contract. Courts cannot rewrite agreements and impose terms to which neither party has agreed. Even if a contract can be cured, the court should also ask whether unconscionability should be cured through severance or restriction because the interests of justice would be furthered by such actions. This part of the inquiry focuses on whether mere severance of the unconscionable terms would function to condone an illegal scheme and whether the defects in the agreement indicate that the stronger party engaged in a systematic effort to impose arbitration on the weaker party not simply as an alternative to litigation, but to secure a forum that works to the stronger party's advantage. If the answer to either question is yes, the court should refuse to enforce the agreement. In conducting this analysis, the court may also consider the deterrent effect of each option. Severing multiple unconscionable provisions from an agreement and enforcing the remainder could create an incentive for an employer to draft a one-sided arbitration agreement in the hope employees would not challenge the unlawful provisions, but if they did, the court would simply modify the agreement to include the bilateral terms the employer should have included in the first place. Although there are no bright-line numerical rules regarding severance, it is fair to say that the greater the number of unconscionable provisions a contract contains the less likely it is that severance will be the appropriate remedy. <\/strong>Finally, if the contract contains a severance clause, the court should take it into account as an expression of the parties' intent that an agreement curable by removing defective terms should otherwise be enforced. That said, the parties to an agreement cannot divest a trial court of its discretion under Civil Code section 1670.5 by including such a severance clause.<\/p>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

UNCONSCIONABILITY Cook v. University of Southern California, 102 Cal. App. 5th 312 Heckman v. Live Nation Entertainment, Inc.. 120 F. 4th 670 Jenkins v. Dermatology Management LLC, 107 Cal. App. 5th 633 Ronderos v. USF Reddaway, Inc., 114 F. 4th 1080 Ramirez v. Charter Communications, Inc., 16 Cal. 5th 478 Cook v. University of Southern […]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-2082","page","type-page","status-publish","hentry"],"_links":{"self":[{"href":"https:\/\/gifted-chandrasekhar.174-138-183-210.plesk.page\/index.php?rest_route=\/wp\/v2\/pages\/2082","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gifted-chandrasekhar.174-138-183-210.plesk.page\/index.php?rest_route=\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/gifted-chandrasekhar.174-138-183-210.plesk.page\/index.php?rest_route=\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/gifted-chandrasekhar.174-138-183-210.plesk.page\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/gifted-chandrasekhar.174-138-183-210.plesk.page\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2082"}],"version-history":[{"count":8,"href":"https:\/\/gifted-chandrasekhar.174-138-183-210.plesk.page\/index.php?rest_route=\/wp\/v2\/pages\/2082\/revisions"}],"predecessor-version":[{"id":3297,"href":"https:\/\/gifted-chandrasekhar.174-138-183-210.plesk.page\/index.php?rest_route=\/wp\/v2\/pages\/2082\/revisions\/3297"}],"wp:attachment":[{"href":"https:\/\/gifted-chandrasekhar.174-138-183-210.plesk.page\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2082"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}