Murphy v. Check 'N Go of California, Inc

In Murphy v. Check 'N Go of California, Inc. (2007) 156 Cal.App.4th 138, Division One of this District considered whether the arbitrator or the trial court should have decided whether an arbitration agreement was unconscionable where the arbitration agreement defined arbitrable claims to include "any assertion by you or us that this Agreement is substantively or procedurally unconscionable" -- which, according to the defendant, was "clear and unmistakable" evidence of an agreement to arbitrate unconscionability issues. (Murphy, supra, 156 Cal.App.4th at p. 144.) The appellate court rejected the defendant's reasoning, concluding that, "while the language of the agreement could not be clearer, plaintiff's alleged assent to this provision was vitiated by the fact that it was set forth in a contract of adhesion, i.e., a standardized contract drafted by the stronger party and presented to the weaker party on a take-it-or-leave-it basis." (Ibid.) The Murphy court then went further, concluding that, because the arbitration agreement was contained in an adhesion contract, any provision requiring the arbitrator to decide the agreement's unconscionability was itself substantively unconscionable. The court reasoned that, while "facially mutual insofar as it covers assertions of unconscionability by 'you or us,' " the provision was "entirely one sided because defendant cannot be expected to claim that it drafted an unconscionable agreement." (Murphy, supra, 156 Cal.App.4th at p. 145.) As such, the court ultimately held "under the circumstances of this case, the judge is the proper gatekeeper to determine unconscionability." (Ibid.)