OTLA Trial Lawyer Fall 2021

34 Trial Lawyer • Fall 2021 Push and Pull Continued from p 31 Likewise, in Epic Sys. Corp. v. Lewis , 138 S Ct 1612 (2018), the Court rejected an effort by the National Labor Relations Board to invalidate class arbitration waiv- ers in the context of labor-relations claims. And in Am. Exp. Co. v. Italian Colors Rest. , 570 US 228 (2013), the Court explicitly held a class arbitration waiver must be enforced even where the plaintiff’s cost of individually arbitrating the claim exceeds any potential recovery, such that the waiver causes the plaintiff not to pursue the claim at all. Class actions are not the only areas where the Court has shut down efforts to avoid its view of the FAA. In Concep- cion , the Court made clear challenges to arbitration cannot be based on theories that take a dim view of arbitration, apply only to arbitration, derive their meaning from the fact that arbitration is at issue or disproportionately impact arbitration clauses. In short, arbitration clauses get preferential treatment compared to all other contract clauses. That is why Cali- fornia’s common law rule saying that class arbitration waivers are unconscionable was struck down. Similarly, in Marmet Health Care Ctr., Inc. v. Brown , 565 US 530 (2012), the Court struck down a West Virginia common law rule that barred as against public policy a pre- dispute arbitration clause that applied to personal-injury and wrongful-death claims against nursing homes. See also Kindred Nursing Centers Ltd. P’ship v. Clark , 137 S Ct 1421 (2017) (Kentucky’s clear-statement rule, requiring an ex- plicit statement in a power of attorney that the attorney-in-fact has authority to waive the principal’s state constitutional rights to access the courts and to a jury trial, disfavors arbitration agreements and, therefore, is preempted by the FAA); CompuCredit Corp. v. Greenwood , 565 US 95 (2012) (unless a federal statute explicitly requires a given claim to be tried in court, such claims are arbitrable under the FAA). Cf. New Prime Inc. v. Oliveira , 139 S Ct 532 (2019) (enforcing narrow exemption in FAA requiring claims of certain transportation workers to be tried in court). Oregon has fallen in line with this paradigm. See Livingston v. Metro. Pedi- atrics, LLC , 234 Or App 137 (2010) (under Oregon UniformArbitration Act, claims subject to arbitration can include statutory claims and intentional torts); Lumm v. CC Servs., Inc. , 290 Or App 39 (2018) (FAA preempts ORS 36.620(5), which bars arbitration clauses in employ- ment contracts unless certain require- ments are met). It’s unconscionable The Court’s cases have left room for one category of challenges to arbitration clauses: challenges based on generally applicable rules of state law that are to- tally neutral as to arbitration. The most common type of challenge is unconscio- nability. But unconscionability can be difficult to prove, and, while substantive unconscionability alone can defeat an arbitration clause, Oregon has not de- cided if procedural unconscionability alone can do the same. Hatkoff v. Portland Adventist Med. Ctr. , 252 Or App 210 (2012). The best case for Oregon plaintiffs is Vasquez-Lopez v. Beneficial Oregon, Inc. , 210 Or App 553 (2007), where the court held an arbitration clause was procedur- ally unconscionable because it was adhesive and obtained through oppres- sion and surprise, and substantively un- conscionable because it contained a waiver of class arbitration and required the plaintiff to pay unaffordable arbitra- tion costs. Subsequent decisions have limited Vasquez-Lopez to its facts, however. The court’s reliance on the class arbitration waiver, for example, was rendered in- valid by the U.S. Supreme Court in Conception . Moreover, the Oregon Court of Appeals later held the fact that an ar- bitration clause is adhesive does not alone render it unenforceable. Sprague v. Qual- ity Restaurants Nw., Inc. , 213 Or App 521 (2007); Gist v. ZoAn Mgmt., Inc. , 305 Or App 708 (2020), rev allowed, 367 Or 257 (2020). See also Livingston (plaintiff needs to prove more than unequal bar- gaining power). So the vitality of Vasquez- Lopez now rests on just the procedural factors of oppression and surprise, and the substantive factor of unaffordable arbitration costs. But even the costs issue is difficult. You cannot rest on generalized fairness arguments or assumed notions of finan- cial impact; you need detailed evidence to win. The need for evidence is illus- trated by Gist , where the plaintiff argued that an arbitration clause was unconscio- nable because it forced the plaintiff to pay arbitration costs. Unlike in Vasquez- Lopez , the clause in Gist permitted the arbitrator to require the losing party to pay costs, and there was no evidence as to what the costs would be or whether they would be too onerous for the plain- tiff to pay. The Oregon Court of Appeals held when an arbitration costs provision is not facially onerous and when the plaintiff’s factual information is incom- plete, the court will not rely on specula- tion to declare the provision unconscio- nable. The court in Gist also rejected the plaintiff’s argument the arbitration clause was unconscionable because it required each side to pay its own attorney fees. The court noted this provision was fa- cially even-handed, not one-sided, and there was no evidence indicating the clause would deter or unreasonably bur- den the plaintiff’s ability to pursue their claims. This conclusion was similar to the one the Court of Appeals reached in Livingston , where again, the plaintiff proffered no evidence, but relied merely on the terms of the arbitration clause and naked policy arguments. There, the court approved a clause that contained a fee- shifting provision requiring the loser to pay the attorney fees of the prevailing party, despite the theoretical risk that, if the plaintiff did not prevail, they would