In several prior decisions, the Ninth Circuit had held that Circuit City?s arbitration agreement, at least in the form in which it existed in the late 1990s, was unconscionable under California law. Circuit City?s arbitration agreement lacked bilaterality, limited statutory remedies, reduced the? statute? of? limitations,? required? the proceedings to be secret, prohibited class actions and gave Circuit City the right to change the arbitration procedures at any time. ?In the wake of these decisions, Circuit City had retroactively eliminated most of the unconscionable features. The? Ninth? Circuit? had? already? ruled? that? this could not save the agreement under California law.? ?This case raised the question whether Washington?s law of unconscionability would lead to the same result.? ?The case had a particularly tortured procedural history.? ?The employee originally filed suit in 1998.?? Circuit City moved to compel arbitration, which the district court denied on the basis of Duffeld and federal law.?? ?The Ninth Circuit originally affirmed.? ?The U.S. Supreme Court granted certiorari and remanded to the Ninth Circuit in light of Adams v. Circuit City. ?The Ninth Circuit then heard argument, vacated the district court?s decision,? and? remanded? for? consideration? of state ?law ?unconscionability.???? Judge ?Pechman ruled the agreement was substantively unconscionable and the Ninth Circuit affirmed in the instant opinion. ?The majority concluded that the recently decided Adler and Zuver cases (see below) ?were ?essentially ?consistent ?with ?Ninth Circuit precedent on substantive unconscionability. In dissent, Judge Bea would have?? certified the issue to the Washington Supreme Court. ?Al-Safin v. Circuit City Stores, No. 035297 (Tashima, Paez, Bea; 01/14/05).
Circuit City?s Arbitration Agreement Unconscionable Under Washington Law
Jan 14, 2005