March 31, 2016 Practice Points

Ninth Circuit: Severance of Unconscionable Provision of Arbitration Clause Preferred When Feasible

The application of unconscionability to arbitration agreements remains a gray area

by Manfred Muecke

In a recent 2–1 decision directing arbitration, the U.S. Court of Appeals for the Ninth Circuit panel provided further guidance regarding state-law unconscionability challenges to arbitration agreements. Merkin, et al. v. Vonage America, Inc., --- F. App'x ---, 2016 WL 775620 (9th Cir. Mar. 24, 2016).   

A judge in the Central District of California had denied defendant Vonage America, Inc.’s motion to compel arbitration in a putative class action challenging certain fees Vonage levied in connection with its voice over Internet protocol (VoIP) telephone service.

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