Although national policy encourages arbitration of disputes, submission to arbitration is consensual, not coercive. Thus, a court cannot force a party to arbitrate unless that party has entered into a contractual agreement to do so. In order to determine whether the parties intended to submit to arbitration, a court reviews the contract at issue. In so doing, a court employs the standard methods of contract interpretation, using state-law principles. Ambiguities, however, are resolved in favor of arbitration.
Plaintiff class brought an action against defendant corporation alleging trespass to property and privacy regarding plaintiffs use of defendant's computer network. Defendant moved to stay and enforce arbitration under the arbitration clause contained in its licensing agreement. The court ordered arbitration pursuant to the arbitration clause. Intervenor filed additional arguments in support of plaintiffs' opposition to arbitration, claiming that the license agreement did not constitute a writing, that the arbitration clause should be read narrowly to preclude enforcement in plaintiffs' action, and that the arbitration provision was unenforceable because it was unconscionable. The court rejected intervenor's additional arguments.
Is the arbitration provision substantively unconscionable?
Defendant's license agreement was a written agreement, and even a narrow reading of the agreement did not preclude enforcement. The agreement was not unconscionable. The costs of arbitration do not prevent the enforcement of a valid arbitration agreement.