April 28, 2011 Articles

Florida Considers Unconscionability in Class-Action Waivers

The Florida Supreme Court heard oral argument in Pendergast v. Sprint Nextel Corp., which considered public-policy exceptions to class-action waivers in arbitration clauses.

By Benjamin Kelley and Jamy Dinkins

At the Eleventh Circuit’s request, the Florida Supreme Court heard oral argument in Pendergast v. Sprint Nextel Corp. on February 10, 2011. The Eleventh Circuit asked the Florida Supreme Court to consider Florida’s public-policy exceptions to class-action waivers in arbitration clauses and requested that the court determine what kind of framework courts should use for both procedural and substantive unconscionability, whether the wireless contract at issue was procedurally or substantively unconscionable, and whether the contract was void.

James Pendergast’s federal class-action complaint alleged that Sprint charged customers improper roaming fees for calls made within Sprint’s geographic coverage area. He filed suit under the Florida Deceptive and Unfair Trade Practices Act and provisions of Florida law, including breach of contract and negligent misrepresentation. Sprint responded with a motion to compel arbitration, claiming that a 2008 service agreement barred suit because it contained an arbitration clause and a class-action waiver clause. The Southern District of Florida granted the motion to compel arbitration and rejected Pendergast’s arguments that the class-action waiver and arbitration clauses were unconscionable and therefore unenforceable under Florida law. Pendergast appealed to the Eleventh Circuit.

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